BILL NUMBER: AB 3483	AMENDED
	BILL TEXT

	AMENDED IN SENATE   JULY 7, 1996
	AMENDED IN ASSEMBLY   MAY 23, 1996

INTRODUCED BY   Committee on Budget (Miller (Chairman), Alby,
Baugh, Cunneen, Harvey, Hawkins, Kaloogian, Knowles, Kuykendall,
Morrow, Olberg, and Richter)   Assembly Member Friedman

    (Coauthor:  Senator Solis) 

                        APRIL 10, 1996

   An act  relating to public social services, and declaring
the urgency thereof, to take effect immediately.   to
amend Sections 1797.254, 102247, 102250, 116590, 116600, 120955, and
123227 of, to amend and renumber Section 4019.10 of, to add Sections
116377 and 123228 to, to add Chapter 12 (commencing with Section
1799.202) to Division 2.5 of, to add and repeal Section 103640 of,
the Health and Safety Code, to amend Sections 4359, 4643, 5778,
14005.21, 14005.8, 14005.85, 14021.6, 14105.31, 14105.33, 14105.35,
14105.37, 14105.38, 14105.39, 14105.4, 14105.405, 14105.41, 14105.42,
14105.91, 14105.915, 14105.916, 14132.44, 14132.47, 14132.90,
14133.22, 14148.5, and 14163 of, to amend and repeal Section 4791 of,
to add Sections 4681.3, 4776.5, 6600.05, 7200.05, 14005.81, 14511,
and 14512 to, to add and repeal Chapter 14 (commencing with Section
18993) of Part 6 of Division 9 of, to add and repeal Division 24
(commencing with Section 24000) of, and to add and repeal Sections
14087.305 and 14105.335 of, the Welfare and Institutions Code, and to
amend Section 24 of Chapter 305 of the Statutes of 1995, relating to
health, and declaring the urgency thereof, to take effect
immediately. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 3483, as amended,  Assembly Committee on Budget
  Speier  .   Medi-Cal  
Health  . 
   Existing law creates an Emergency Medical Services Authority in
the Health and Welfare Agency.  It requires the authority to, among
other things, provide technical assistance to agencies, counties, and
cities for developing components of emergency medical services
systems.
   This bill would establish the Emergency Medical Services for
Children Program within the authority, contingent upon available
funding, and would authorize local emergency medical service agencies
to develop the program and, if so, to integrate an emergency medical
services for children program component, as specified, into their
emergency medical services plan.  It would provide that no more than
$120,000 per fiscal year shall be expended from the General Fund by
the authority for the program.  This bill would require the
authority, among other things, on or before March 1, 2000, to produce
a report for the Legislature describing any progress made on the
implementation of the program.
   Existing law, the California Safe Drinking Water Act, requires the
State Department of Health Services to administer provisions
relating to the regulation of drinking water and public water
systems.
   Existing law requires the department to assess fees to public
water systems for specified costs and requires that the department
submit an invoice to the water systems prior to September 1 of the
fiscal year that the costs are incurred.
   This bill would limit the application of this requirement to
public water systems serving 1,000 or more service connections or
treating water on behalf of one or more public water systems and
would revise the invoice submission procedures.
   Existing law continuously appropriates funds in the Safe Drinking
Water Account for purposes of the California Safe Drinking Water Act.

   This bill would delete the continuous appropriation and would
provide for use of these funds for purposes of that act upon
appropriation by the Legislature.
   Existing law repeals these and related fiscal provisions on
January 1, 1997.
   This bill would, instead, repeal those provisions on January 1,
2002, and would extend total fee limitations indefinitely.
   Existing law establishes the State Vital Record Improvement
Account in the Health Statistics Special Fund for specified purposes,
including the improvement and automating of vital records maintained
by the State Registrar.
   This bill would terminate that account, and would specify that
funds in the account shall remain in the account for expenditure upon
appropriation by the Legislature.
   Existing law, effective until January 1, 1997, requires the
imposition of various fees for certified copies of birth or death
records, marriage records, marital dissolution records, and specifies
that an additional fee of $2 shall be imposed for allocation to
specified accounts for modernization and improvement of public record
systems and collection of the data.
   This bill would extend these requirements until January 1, 1999,
but would require that a fee of up to $2 shall be imposed for that
purpose and would make conforming changes in the allocations.
   Existing law provides for the establishment and implementation of
a program of benefits for persons with acquired traumatic brain
injuries, and provides that program shall remain in effect until
January 1, 1997.
   This bill would extend the effective date of these provisions to
January 1, 2000.
   Existing law requires the Director of Health Services to establish
and administer a program to provide drug treatments to persons
infected with human immunodeficiency virus, to the extent funds are
available, and to maintain a list of drugs to be provided under the
program.
   This bill would require manufacturers of the drugs to pay a 15%
rebate to the department for each drug, based on the average
wholesale cost of the drugs.  It would permit the department to adopt
emergency regulations to implement amendments to provisions relating
to this program made during the 1996 portion of the 1995-96 Regular
Session.
   Existing law requires the Maternal and Child Health Branch of the
State Department of Health Services to administer a comprehensive
shelter-based services grant program for battered women.
   This bill would define terms used in those provisions, would
recast provisions for the implementation of the program to specify
that the grants shall be administered pursuant to a request for
application process, include grants for shelters that propose to
maintain shelters previously granted funding, revise the schedule of
areas or services for which the grants may be used, require the
administration of grants to agencies to conduct demonstration
projects to serve battered women that include new and innovative
service approaches, revise the scope of the intent of the Legislature
with respect to the provision of services in underserved
communities, and authorize the Director of Health Services to award
additional grants to shelter-based agencies when it is determined
that there exists a critical need for shelter or shelter-based
services, revise matching fund requirements, and specify minimum
training requirements for appropriate staff and volunteers having
client contact.
   Existing law requires the State Department of Developmental
Services to enter into contracts with nonprofit entities to operate
regional centers for the provision of services to persons with
developmental disabilities, provides for initial intake and
assessment services to determine the level of service for which an
applicant is eligible, and requires that, if assessment is needed, it
shall be performed within a certain time period.
   This bill would revise the time period during which the assessment
is required to be provided.
   Existing law specifies the responsibilities of regional centers
for the provision of services under a contract with the State
Department of Developmental Services.
   This bill would revise those responsibilities.
   Existing law requires the State Department of Developmental
Services to establish rates for payment of community living
facilities for the provision of services to persons with
developmental disabilities, and specifies that the cost of providing
24-hour care out-of-home nonmedical care and supervision in community
care facilities shall be funded by the Aid to Families with
Dependent Children (AFDC) program, in which counties participate
financially.
   This bill would specify that for the 1996-97 fiscal year, the rate
schedule authorized by the department in operation June 30, 1996,
shall be increased based on the amount appropriated in the Budget Act
of 1996, and specifies that the increase be applied as a percentage
for all contractors.
   Existing law requires regional centers to submit, prior to August
1 of each year, to the State Department of Developmental Services and
the State Council on Developmental Disabilities a program budget
plan for the subsequent following year.
   This bill would specify that regional centers shall not be subject
to any law, regulation, or policy of state agencies pertaining to
the planning and acquisition of information technology, and would
require the State Department of Developmental Services to jointly
develop guidelines with the Association of Regional Center Agencies
for use by regional centers in the expenditure of funds for those
information activities.
   Existing law provides for the placement of certain individuals in
various state hospitals for mental health treatment.
   This bill would express the intent of the Legislature that persons
placed for mental health treatment through criminal proceedings be
placed at Atascadero State Hospital in the 1996-97 fiscal year,
unless there are unique circumstances that would preclude the
placement and that not more than 227 persons whose placement has been
required by provisions of the Penal Code be placed in Metropolitan
State Hospital in the 1996-97 fiscal year.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Services, pursuant to
which medical benefits are provided to public assistance recipients
and certain other low-income persons.
   This bill would revise eligibility requirements for Medi-Cal
benefits for families who lose eligibility for AFDC benefits due to
the reuniting of separated spouses, subject to federal financial
participation.
   Existing law provides for the determination of maximum allowable
reimbursement rates for Medi-Cal drug treatment programs.
   This bill would revise the method of calculating those maximum
rates, and would require the State Department of Health Services to
develop individual and group rates for extensive counseling for
outpatient drug free treatment according to limitations contained in
the bill.
   Existing law provides for the provision of Medi-Cal benefits
through contracts between the State Department of Health Services and
providers for managed care services.
   This bill would, until July 1, 1997, exclude hospice benefits from
the scope of Medi-Cal benefits provided through specified managed
care programs where the department is contracting with prepaid health
plans that are contracting with, governed, owned, or operated by a
county health authority.
   Existing law requires the State Department of Mental Health to
implement managed mental health care for Medi-Cal beneficiaries
through fee-for-service or capitated rate contracts negotiated with
mental health plans, including counties, counties acting jointly, any
qualified individual or organization, or a nongovernmental entity.
   Existing law provides for the transfer of funding and
responsibility for fee-for-service mental health services from
Medi-Cal managed care plans to local mental health plans and for the
allocation of state funds for acute inpatient psychiatric and other
mental health services, as determined by the State Department of
Mental Health, and requires the provision of those services on a
capitated rate upon federal approval.
   Under existing law, a qualifying county may elect, with the
approval of the department, to operate under the requirements of a
capitated, integrated service system field test in specified
circumstances.
   Existing law requires the transfer of state matching funds to the
State Department of Mental Health for the remaining Medi-Cal
fee-for-service mental health services and the state matching funds
associated with field test counties, no later than July 1, 1996, upon
agreement between the State Department of Mental Health and the
State Department of Health Services.
   This bill would change the date by which those remaining matching
funds shall be transferred to the State Department of Mental Health
from July 1, 1996, to July 1, 1997.
   Existing law, until January 1, 1997, provides for the provision of
drugs that are reimbursed through the Medi-Cal program without prior
authorization when they are on an approved list of contract drugs,
and, commencing January 1, 1997, those procedures would be revised to
require the establishment of a drug formulary for prescribed drugs.

   This bill would suspend until January 1, 1999, the operative date
of those provisions applicable to the establishment of a drug
formulary, would revise procedures for the placement of drugs on the
list of contract drugs, would revise, and extend until January 1,
1999, requirements for reporting on treatment authorization requests
to the Legislature, and would extend until January 1, 1999, those
provisions for the use of a list of contract drugs for purposes of
the Medi-Cal program.
   Existing law, until January 1, 1997, requires the State Department
of Health Services to report to the Legislature on the treatment
authorization process.
   This bill would extend the effective date of that requirement to
January 1, 1997, and would require the Bureau of State Audits to
prepare a report by January 1, 1998, on the drug program management
techniques of the drug contracting program and the comparability of
the program to other private sector third party payers.
   Existing law, until January 1, 1997, authorizes the State
Department of Health Services to enter into contracts with
manufacturers of single-source and multiple-source drugs under the
Medi-Cal program, and specifies procedures for the implementation of
that authority.
   This bill would extend that authority to January 1, 1999.
   Existing law, until July 1, 1996, requires pharmaceutical
manufacturers to provide the State Department of Health Services with
a supplemental 10% rebate in addition to rebates pursuant to other
provisions of law, less any state supplemental rebate provided under
separate state agreements for each prescription drug reimbursed
through the Medi-Cal program.
   This bill would extend that requirement until January 1, 1997.
   Existing law provides for targeted case management services under
the Medi-Cal program, and authorizes local agencies to implement
targeted case management services, establishes local government
financial contribution for the coverage of services through the
targeted case management program, and, for the 1994-95 and 1995-96
fiscal years, limits the contribution to $20,000,000.
   This bill would revise the contribution requirements and would
extend the contribution limit indefinitely.
   Existing law provides that, to the extent required under federal
law, a family who was receiving Aid to Families with Dependent
Children (AFDC) program benefits in at least 3 of the 6 months prior
to the month the family became ineligible for assistance due to
specified reasons, shall remain eligible for Medi-Cal benefits during
the succeeding 6-month period.
   This bill would, instead, provide that during any period for which
federal financial participation is obtained, to the extent required
by federal law, a family who was receiving AFDC benefits in at least
3 of the 6 months immediately preceeding the month in which that
family became ineligible for that assistance due to specified
reasons, shall remain eligible for Medi-Cal benefits during the
immediately succeeding 6-month period.
   Existing law specifies that any aged, blind, or disabled person
eligible for Medi-Cal benefits immediately prior to specified maximum
aid payment reductions in benefits under the State Supplementary
Program for the Aged, Blind and Disabled shall not be responsible for
paying his or her share of cost for Medi-Cal benefits, if he or she
had that Medi-Cal eligibility without a share of costs interrupted or
terminated by the maximum aid payment reductions and if he or she,
but for those reductions, would be eligible to continue receiving
Medi-Cal benefits without a share of costs.
   This bill would extend this provision to reductions made during
the 1996 portion of the 1995-96 Regular Session.
   Existing law, operative until July 1, 1996, and which would be
repealed on January 1, 1997, provides for state-funded perinatal
services and medical services to infants up to one year of age, in
families with incomes above 185%, but not more than 200% of the
federal poverty level.
   Existing law requires the department to provide for outreach
activities in order to enhance participation and access to perinatal
services, with these activities to be funded from funds appropriated
for provision of these services and available federal funds.
   This bill would extend those provisions indefinitely, but would
eliminate the outreach activity funding provisions.
   Existing law requires the State Department of Mental Health to
implement managed mental health care for Medi-Cal beneficiaries
through fee-for-service or capitated rate contracts with mental
health plans, and specifies that emergency regulations developed to
implement those provisions shall remain in effect until July 1, 1996,
or until the regulations are made permanent, whichever occurs first.

   This bill would extend the effective period of those regulations
until July 1, 1997, or until the regulations are made permanent,
whichever occurs first.
   Existing law creates the child health and disability prevention
program, administered by the State Department of Health Services,
under which health screening and other services are provided through
community child health and disability prevention programs.
   The bill would require the department, by March 1, 1997, to report
specified data to the Legislature concerning this program.
   Existing law establishes various social services programs to
prevent teenage pregnancies and assist teenage parents.
   This bill would establish the Community Challenge Grant Program in
the State Department of Health Services to provide community
challenge grants to reduce the number of teenage and unwed
pregnancies.  It would require the department to administer grants to
be awarded to described entities for the purpose of implementing
locally developed prevention and intervention strategies.  It would
require the Secretary of the Health and Welfare Agency to appoint an
advisory committee to advise and consult with the department
regarding the program.  It would set forth requirements for grant
applications, provide criteria for grant selection, and require the
department to issue periodic reports that describe the projects that
have been awarded grants.  The bill would terminate the program on
July 1, 1999, require the department to conduct an evaluation and
report its findings to the Legislature on or before January 1, 1999,
and repeal these provisions as of January 1, 2000.
   Existing law establishes the Office of Family Planning in the
State Department of Health Services, and authorizes the department to
enter into contracts with agencies, institutions, and organizations
to provide family planning services, as described.  Existing law
requires family planning services to be offered to all persons
eligible for Medi-Cal benefits, to all persons eligible for public
social services for which federal reimbursement is available under
the federal Social Security Act, and to any persons in a family for
which current social, economic, and health conditions of the family
indicate that the family would likely become a recipient of financial
assistance within the next 5 years.  Existing law requires the
office to develop and implement a sliding fee schedule for family
planning services based on family size and income.
   This bill would also establish the State-Only Family Planning
Program in the department, to provide comprehensive clinical family
planning services, as described, to low-income men and women.
   The bill would require that a person is eligible to receive the
services if the person is a resident of the state, has a family
income at or below 200% of the federal poverty level, has no other
health coverage, except as described, and is not otherwise eligible
for Medi-Cal services without a share of cost. The bill would require
the provider of the services to determine whether a person meets the
eligibility standards.  It would require an individual to sign a
statement under penalty of perjury pertaining to eligibility.  By
changing the definition of an existing crime, this bill would impose
a state-mandated local program.
   The bill would authorize licensed medical personnel with family
planning skills, knowledge, and competency only to provide the full
range of family planning medical services.  The bill would place
certain requirements on Medi-Cal enrolled providers.
   The bill would require providers of the services to submit claims
for reimbursement to the fiscal intermediary of the department.
   The bill would set forth a grievance process.
   The bill would authorize the department to adopt emergency
regulations.
   The bill would exempt the program from certain requirements
relating to the use of contractual claims processing services.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   This bill would provide that if any provision of the bill or the
application thereof to any person or circumstances is held invalid,
that invalidity shall not affect other provisions or applications of
the bill which can be given effect without the invalid provision or
application, and to this end the provisions of this bill are
severable.
  This bill would declare that it is to take effect immediately as an
urgency statute.  
   Existing law provides for the Medi-Cal program, administered by
the State Department of Health Services, under which qualified
low-income persons are provided with health care services.
   This bill would express the intent of the Legislature to make the
statutory changes necessary to implement the Budget Act of 1996
relative to the Medi-Cal program.
  This bill would declare that it is to take effect immediately as an
urgency statute. 
   Vote:  2/3.  Appropriation:   no   yes 
.  Fiscal committee:   no   yes  .
State-mandated local program:   no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  
  SECTION 1.  It is the intent of the Legislature, in enacting this
act, to make the statutory changes necessary to implement the Budget
Act of 1996 relative to the Medi-Cal program.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order for this act to be implemented prior to the commencement
of the 1996-97 fiscal year, this act must take effect immediately.
 
  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Various reports and investigations have documented
deficiencies in pediatric emergency and critical care throughout the
United States.  A 1993 report from the Institute of Medicine of the
National Academy of Sciences found that emergency medical services
for children in the United States are inadequate.  The report
recommends that states develop emergency medical services systems for
children within the emergency medical services system to ensure that
children receive adequate and appropriate emergency medical services
necessary to prevent loss of life and human potential.
   (b) California has approximately two and one half million children
under 14 years of age, (8.5 percent of the U.S. population, 1990
Census) within its borders, the largest pediatric population of any
state in the United States.  California's children experience
unnecessarily high rates of injury and illness that lead to
disability and death.  Lifetime costs associated with fatal and
nonfatal injury in 1991 were estimated at $15.3 billion for children
under 15 years of age, and $100.3 billion for 15- to 24-year olds.
Available estimates indicate that the implementation of comprehensive
and coordinated services for emergency medical services ensures more
appropriate care and an emergency medical services system for
children would provide significant economic benefits.
   (c) Each year in California, approximately 240 children per
100,000 will require admission to pediatric critical care centers,
yet only 55 percent of these children in need of this care actually
receive it.  Seventy percent of the children in pediatric care units
are five years of age or less, and suffer from medical illnesses such
as acute asthma, meningitis, and other infectious diseases,
seizures, and poisonings.  Acute illness is a source of enormous
ongoing physical, psychological, and financial loss to children and
families.  Twenty-one thousand children die annually within the
United States from these illnesses.
   (d) Traumatic injuries, including, but not limited to, injuries
attributed to automobiles, bicycles, burns, drowning, intentional
injury or violence, and firearms are the most common cause of death
in children over one year old.  Statistics also show that children
have an unacceptably high death rate in these emergency situations.
It has been estimated that between 8,000 and 12,000 of the 22,000
children who die from injuries each year in the United States could
be saved by the establishment of injury prevention programs and
emergency medical services systems specifically for children.
   (e) Children have unique problems and needs associated with acute
injury and illness, and they also suffer from different types of
injuries and illnesses than adults.  As a result, children require
different types of diagnostic procedures, medications, and support
techniques.  In order to avoid unnecessary injuries and deaths when
treating children, their emergency and critical care medical needs
should be recognized and treated appropriately within this state's
existing emergency medical services system.
   (f) Existing emergency medical services education programs
primarily focus on assessment, care, and treatment of adults and
offer very few hours of pediatric education.  In addition, many
emergency medical services personnel have limited clinical experience
with children, indicating the need to improve education of these
personnel as regards pediatric emergencies.
   (g) Some hospitals and out-of-hospital emergency care providers do
not have the appropriate pediatric equipment to treat children in
need of emergency care.
   (h) Requiring pediatric preparedness in every emergency department
as well as access to specialized pediatric centers would ensure that
all of California's children who need emergency medical care will
get appropriate pediatric emergency and critical care.
   (i) The California Emergency Medical Services Authority has
received national recognition for their leadership in the development
of guidelines for a statewide pediatric emergency and critical care
medical services model. Full implementation of the Emergency Medical
Services for Children (EMSC) guidelines on a statewide basis must be
achieved.
  SEC. 2.  Section 1797.254 of the Health and Safety Code is amended
to read: 
   1797.254.  Local EMS agencies shall annually submit an emergency
medical services plan for the EMS area to the authority  ,
according to EMS Systems, Standards, and Guidelines established by
the authority  .   
  SEC. 3.  Chapter 12 (commencing with Section 1799.202) is added to
Division 2.5 of the Health and Safety Code, to read:

      CHAPTER 12.  EMERGENCY MEDICAL SERVICES SYSTEM FOR CHILDREN

   1799.202.  This chapter shall be known and may be cited as the
California Emergency Medical Services for Children Act of 1996.
   1799.204.  (a) For purposes of this chapter, the following
definitions apply:
   (1) "EMSC Program" means the Emergency Medical Services For
Children Program administered by the authority.
   (2) "Technical advisory committee" means a multidisciplinary
committee with pediatric emergency medical services, pediatric
critical care, or other related expertise.
   (3) "EMSC component" means the part of the local agency's EMS plan
that outlines the training, transportation, basic and advanced life
support care requirements, and emergency department and hospital
pediatric capabilities within a local jurisdiction.
   (b) Contingent upon available funding, an Emergency Medical
Services For Children Program is hereby established within the
authority.
   (c) The authority shall do the following to implement the EMSC
Program:
   (1) Employ or contract with professional, technical, research, and
clerical staff as necessary to implement this chapter.
   (2) Provide advice and technical assistance to local EMS agencies
on the integration of an EMSC Program into their EMS system.
   (3) Oversee implementation of the EMSC Program by local EMS
agencies.
   (4) Establish an EMSC technical advisory committee.
   (5) Facilitate cooperative interstate relationships to provide
appropriate care for pediatric patients who must cross state borders
to receive emergency and critical care services.
   (6) Work cooperatively and in a coordinated manner with the State
Department of Health Services and other public and private agencies
in the development of standards and policies for the delivery of
emergency and critical care services to children.
   (7) On or before March 1, 2000, produce a report for the
Legislature describing any progress on implementation of this
chapter.  The report shall contain, but not be limited to, a
description of the status of emergency medical services for children
at both the state and local levels, the recommendation for training,
protocols, and special medical equipment for emergency services for
children, an estimate of the costs and benefits of the services and
programs authorized by this chapter, and a calculation of the number
of children served by the EMSC system.
   (d) No more than one hundred twenty thousand dollars ($120,000)
per fiscal year shall be expended from the General Fund by the
authority for the EMSC program.
   1799.205.  A local EMS agency may develop an EMSC Program in its
jurisdiction, contingent upon available funding.  If a local EMS
agency develops an EMSC Program in its jurisdiction, the local EMS
agency shall develop and incorporate in its EMS plan an EMSC
component that complies with EMS plan requirements.  The EMSC
component shall include, but need not be limited to, the following:
   (a) EMSC system planning, implementation, and management.
   (b) Injury and illness prevention planning, that includes, among
other things, coordination, education, and data collection.
   (c) Care rendered to patients outside the hospital.
   (d) Emergency department care.
   (e) Interfacility consultation, transfer, and transport.
   (f) Pediatric critical care and pediatric trauma services.
   (g) General trauma centers with pediatric considerations.
   (h) Pediatric rehabilitation plans that include, among other
things, data collection and evaluation, education on early detection
of need for referral, and proper referral of pediatric patients.
   (i) Children with special EMS needs outside the hospital.
   (j) Information management and system evaluation.
   1799.207.  The authority may solicit and accept grant funding from
public and private sources to supplement state funds.
  SEC. 4.  Section 4019.10 of the Health and Safety Code is amended
and renumbered to read:  
   (116565) 4019.10.   
   116565.   (a)  Commencing January 1, 1993, until June
30, 1993, each public water system serving 200 or more service
connections and any public water system that treats water on behalf
of one or more public water systems for the purpose of rendering it
safe for human consumption, shall reimburse the department pursuant
to this section for actual costs incurred by the department for
conducting those activities mandated by this chapter relating to the
issuance of domestic water supply permits, inspections, monitoring,
surveillance, and water quality evaluation that relate to that
specific public water system.  The amount of reimbursement shall be
sufficient to pay, but in no event shall exceed, the department's
actual cost in conducting these activities.
   (b)  Commencing July 1, 1993, each public water system
serving 1,000 or more service connections and any public water system
that treats water on behalf of one or more public water systems for
the purpose of rendering it safe for human consumption, shall
reimburse the department for actual cost incurred by the department
for conducting those activities mandated by this chapter relating to
the issuance of domestic water supply permits, inspections,
monitoring, surveillance, and water quality evaluation that relate to
that specific public water system.  The amount of reimbursement
shall be sufficient to pay, but in no event shall exceed, the
department's actual cost in conducting these activities.  
   (c)  
   (b)  Commencing July 1, 1993, each public water system
serving less than 1,000 service connections shall pay an annual
drinking water operating fee to the department as set forth in this
subdivision for costs incurred by the department for conducting those
activities mandated by this chapter relating to inspections,
monitoring, surveillance, and water quality evaluation relating to
public water systems.  The total amount of fees shall be sufficient
to pay, but in no event shall exceed, the department's actual cost in
conducting these activities.  Notwithstanding adjustment of actual
fees collected pursuant to Section  113   100425
 as authorized pursuant to subdivision (d) of Section 
4019.35   106590  , the maximum amount that shall
be paid annually by a public water system pursuant to this section
shall not exceed the following:


Type of public
water system                                             Fee

  15- 24 service connections ..........................  $250
  25- 99 service connections ..........................  $400
100-499 service connections ..........................  $500
500-999 service connections ..........................  $700
Noncommunity water systems pursuant to
    paragraph (1) of subdivision (j) of
    Section  4010.1   116275 
.............................  $350
Noncommunity water systems exempted pursuant
    to Section  4010.35   116282 
.........................  $100

   (d)  
   (c)  For purposes of determining the fees provided for in
 subdivisions (a) and (b)   subdivision (a)
 , the department shall maintain a record of its actual costs
for pursuing the activities specified in  subdivisions (a)
and (b)   subdivision (a)  relative to each system
required to pay the fees.  The fee charged each system shall reflect
the department's actual cost, or in the case of a local primacy
agency the local primacy agency's actual cost, of conducting the
specified activities.  
   (e)  
   (d) The department shall submit an invoice for cost
reimbursement for the activities specified in  subdivisions
(a) and (b)   subdivision (a) to the public water
systems no more than twice a year.
   (1) The department shall submit one estimated cost invoice to
public water systems serving 1,000 or more service connections and
any public water system that treats water on behalf of one or more
public water systems for the purpose of rendering it safe for human
consumption.  This invoice shall include the actual hours expended
during the first six months of the fiscal year.  The hourly cost rate
used to determine the amount of the estimated cost invoice shall be
the rate for the previous fiscal year.
   (2) The department shall submit a final invoice  to the
public water system prior to September 1  of the fiscal year
 following the fiscal year  in which  
that  the costs were incurred.  The invoice shall indicate the
total hours expended  during the fiscal year  , the reasons
for the expenditure,  and  the hourly cost rate of
the department  for the fiscal year, the estimated cost invoice,
and payments received  .   The amount of the final invoice
shall be determined using the total hours expended during the fiscal
year and the actual hourly cost rate of the department for the fiscal
year.  The payment of the estimated invoice, exclusive of late
penalty, if any, shall be credited toward the final invoice amount.
   (3)  Payment of the invoice  issued pursuant to
paragraphs (1) and (2)  shall be made within  120
  90  days of the date of the invoice.  Failure to
pay the amount of the invoice within  120   90
 days shall result in a 10 percent late penalty that shall be
paid in addition to the  fee   invoiced amount
 .  
   (f)  
   (e)  Any public water system under the jurisdiction of a
local primacy agency shall pay the fees specified in this section to
the local primacy agency in lieu of the department.  This section
shall not preclude a local health officer from imposing additional
fees pursuant to Section  510   101325  .

  SEC. 5.  Section 102247 of the Health and Safety Code is amended to
read: 
   102247.  (a) There is hereby created in the State Treasury the
Health Statistics Special Fund.  The fund shall consist of revenues
including, but not limited to, all of the following:
   (1) Fees or charges remitted to the State Registrar for record
search or issuance of certificates, permits, registrations, or other
documents pursuant to Chapter 3 (commencing with Section 26800) of
Part 3 of Division 2 of Title 3 of the Government Code, and Chapter 4
(commencing with Section 102525), Chapter 5 (commencing with Section
102625), Chapter 8 (commencing with Section 103050), and Chapter 15
(commencing with Section 103600), of Part 1, of Division 102.
   (2) Funds remitted to the State Registrar by the federal Social
Security Administration for participation in the enumeration at birth
program.
   (3) Funds remitted to the State Registrar by the National Center
for Health Statistics pursuant to the federal Vital Statistics
Cooperative Program.
   (4) Funds deposited  into the Vital Records Improvement
Account  pursuant to Section 103640.
   (5) Any other funds collected by the State Registrar, except
Children's Trust Fund fees collected pursuant to Section 18966 of the
Welfare and Institutions Code, fees allocated to the Judicial
Council pursuant to Section 1852 of the Family Code, and fees
collected pursuant to Section 103645, all of which shall be deposited
into the General Fund.
   (b) Moneys in the Health Statistics Special Fund shall be expended
by the State Registrar for the purpose of funding its existing
programs and programs that may become necessary to carry out its
mission, upon appropriation by the Legislature.
   (c) Health Statistics Special Fund moneys shall be expended only
for the purposes set forth in this section and Section 102249, and
shall not be expended for any other purpose or for any other state
program.
   (d) It is the intent of the Legislature that the Health Statistics
Special Fund provide for the following:
   (1) Registration and preservation of vital event records and
dissemination of vital event information to the public.
   (2) Data analysis of vital statistics for population projections,
health trends and patterns, epidemiologic research, and development
of information to support new health policies.
   (3) Development of uniform health data systems that are
integrated, accessible, and useful in the collection of information
on health status.  
   (e) This section shall become operative on July 1, 1995. 
  
  SEC. 6.  Section 102250 of the Health and Safety Code is amended to
read: 
   102250.  (a)  (1)  There is a State Vital Record
Improvement Account in the Health Statistics Special Fund.  
   (2) Commencing January 1, 1997, the State Vital Record Improvement
Account in the Health Statistics Special Fund shall be terminated
and all funds in the State Vital Record Improvement Account in the
Health Statistics Special Fund, or owed to that account as of January
1, 1997, shall remain in the Health Statistics Special Fund and may
be expended, upon appropriation by the Legislature, for the purposes
of the act adding this paragraph or to fulfill other statutory
requirements of the State Registrar. 
   (b) The remainder of the moneys in the account that are not
subject to local allocations on  July 1, 1995  
January 1, 1997  , pursuant to subdivision (a) of former Section
10040, shall  , upon appropriation by the Legislature,  be
utilized by the State Registrar to improve and automate the
processing of vital records maintained by the State Registrar.
   (c) This section shall become operative  July 1, 1995
  January 1, 1997  .   
  SEC. 7.  Section 103640 is added to the Health and Safety Code, to
read:
   103640.  (a) In addition to the fees prescribed by subdivisions
(a) to (d), inclusive, of Section 103625, all applicants for
certified copies of the records described in those subdivisions shall
pay an additional fee of up to two dollars ($2), that shall be
collected by the State Registrar, the local registrar, county
recorder, or county clerk, as the case may be.
   (b) Except as provided in paragraph (2), the local public official
charged with the collection of the additional fee established
pursuant to subdivision (a) may create a Vital and Health Statistics
Trust Fund.  The fees collected by local public officials pursuant to
subdivision (a) shall be distributed as follows:
   (1) Up to ninety cents ($0.90) of each fee collected pursuant to
this section shall be deposited with the State Registrar for deposit
pursuant to Section 102250.
   (2) The remainder of the fee collected pursuant to this section
shall be deposited into the collecting agency's Vital and Health
Statistics Trust Fund.
   (3) Any local public official that does not establish a local
Vital and Health Statistics Trust Fund shall forward the entire fee
collected pursuant to this section to the State Registrar, who shall
deposit the fees pursuant to Section 102250.
   (4) Fees collected by the State Registrar shall be deposited
pursuant to Section 102250.
   (c) Moneys in each Vital and Health Statistics Trust Fund shall be
available to the public official charged with the collection of fees
pursuant to this section to defray the administrative costs of
collecting and reporting with respect to those fees and for the other
costs, as follows:
   (1) Modernization of vital record operations, including
improvement, automation, and technical support of vital record
systems.
   (2) Improvement in the collection and analysis of health-related
birth and death certificate information, and other community health
data collection and analysis, as appropriate.
   (d) Funds collected pursuant to this section shall not be used to
supplant existing funding that is necessary for the daily operation
of vital record systems.  It is the intent of the Legislature that
funds collected pursuant to this section be used to enhance service
to the public, to improve analytical capabilities of state and local
health authorities in addressing the health needs of newborn
children, maternal health problems, and to analyze the health status
of the general population.
   (e) Each county shall annually submit a report to the State
Registrar by March 1, containing information on the amount of
revenues collected pursuant to this section for the previous calendar
year and on how the revenues were expended and for what purpose.
   (f) This section shall remain in effect only until January 1,
1999, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 1999, deletes or extends
that date.
   (g) This section shall become operative on January 1, 1997.
  SEC. 8.  Section 116377 is added to the Health and Safety Code, to
read:
   116377.  The department may adopt emergency regulations in
accordance with Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code, to implement
amendments to this chapter.  The initial adoption of emergency
regulations and one readoption of the initial regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare. Initial emergency regulations and the first readoption of
those regulations shall be exempt from review by the Office of
Administrative Law.  The emergency regulations authorized by this
section shall be submitted to the Office of Administrative Law for
filing with the Secretary of State and publication in the California
Code of Regulations and shall remain in effect for not more than 180
days.
  SEC. 9.  Section 116590 of the Health and Safety Code is amended to
read: 
   116590.  (a) All funds received by the department pursuant to this
chapter, including, but not limited to, all civil penalties
collected by the department pursuant to Article 9 (commencing with
Section 116650) and Article 11 (commencing with Section 116725),
shall be deposited into the Safe Drinking Water Account that is
hereby established.  Funds in the Safe Drinking Water Account may not
be expended for any purpose other than as set forth in this chapter.
   Notwithstanding Section 13340 of the Government Code,
funds   All moneys  collected by the department
pursuant to Sections 116565 to 116600, inclusive,  and
  shall be  deposited into the Safe Drinking Water
Account  are continuously appropriated without regard to
fiscal year to pay the expenses of the department   for
use by the department, upon appropriation by the Legislature, for the
purpose of providing funds necessary  to administer this
chapter.
   (b) The department's hourly cost rate used to determine the
reimbursement for actual costs pursuant to Sections 116565, 116577,
and 116580 shall be based upon the department's salaries, benefits,
travel expense, operating, equipment, administrative support, and
overhead costs.
   (c) Notwithstanding Section 6103 of the Government Code, each
public water system operating under a permit issued pursuant to this
chapter shall pay the fees set forth in this chapter.  A public water
system shall be permitted to collect a fee from its customers to
recover the fees paid pursuant to this chapter.
   (d) The fees collected pursuant to subdivision  (c)
  (b)  of Section 116565 and subdivision (b) of
Section 116570 shall be adjusted annually pursuant to Section 100425,
and the adjusted fee amounts shall be rounded off to the nearest
whole dollar.
   (e) Fees assessed pursuant to this chapter shall not exceed actual
costs to either the department or the local primacy agency, as the
case may be, related to the public water systems assessed the fees.
   (f) In no event shall the total amount of funds collected pursuant
to  subdivisions (a) and (b)   subdivision (a)
 of Section 116565, and subdivision (a) of Section 116577 from
public water systems serving 1,000 or more service connections exceed
the following:
   (1) For the 1992-93 fiscal year, four million nine hundred
thousand dollars ($4,900,000).
   (2) For the 1993-94 fiscal year, four million seven hundred fifty
thousand dollars ($4,750,000).
   (3) For the 1994-95 fiscal year, five million dollars
($5,000,000).
   (4) For the 1995-96 fiscal year, five million two hundred fifty
thousand dollars ($5,250,000).  
   (5) For the 1996-97 fiscal year, five million five hundred
thousand dollars ($5,500,000).
   (6) For the 1997-98 fiscal year and subsequent fiscal years, the
total amount of funds collected shall not increase by more than 5
percent of the amount collected for the previous fiscal year. 
   (g) The department shall develop a time accounting standard
designed to do all of the following:
   (1) Provide accurate time accounting.
   (2) Provide accurate invoicing based upon hourly rates comparable
to private sector professional classifications and comparable rates
charged by other states for comparable services.  These rates shall
be applied against the time spent by the actual individuals who
perform the work.
   (3) Establish work standards that address work tasks, timing,
completeness, limits on redirection of effort, and limits on the time
spent in the aggregate for each activity.
   (4) Establish overhead charge-back limitations, including, but not
limited to, charge-back limitations on charges relating to
reimbursement of services provided to the department by other
departments and agencies of the state, that reasonably relate to the
performance of the function.
   (5) Provide appropriate invoice controls.   
  SEC. 10.  Section 116600 of the Health and Safety Code is amended
to read: 
   116600.  Except as otherwise specified, Sections 116565 to 116600,
inclusive, shall become operative July 1, 1993.  Sections 116565 to
116600, inclusive, shall remain in effect until January 1, 
1997   2002  , and as of that date are repealed
unless a later enacted statute that is enacted before January 1,
 1997   2002 , deletes or extends that
date.   
  SEC. 11.  Section 120955 of the Health and Safety Code is amended
to read: 
   120955.  (a) To the extent that state and federal funds are
appropriated in the Budget Act for these purposes, the director shall
establish and may administer a program to provide drug treatments to
persons infected with human immunodeficiency virus (HIV), the
etiologic agent of acquired immune deficiency syndrome (AIDS).  The
director shall develop, maintain, and update as necessary a list of
drugs to be provided under this program.  Drugs on the list shall
include, but not be limited to, the drugs zidovudine (AZT) and
aerosolized pentamidine.
   (b) The director may grant funds to a county public health
department through standard agreements to administer this program in
that county.  To maximize the recipients' access to drugs covered by
this program, the director shall urge the county health department in
counties granted these funds to decentralize distribution of the
drugs to the recipients.
   (c) The director shall establish a rate structure for
reimbursement for the cost of each drug included in the program.
Rates shall not be less than the actual cost of the drug.  However,
the director may purchase a listed drug directly from the
manufacturer and negotiate the most favorable bulk price for that
drug.
   (d)  Manufacturers of the drugs on the list shall pay the
department a rebate of 15 percent of the average wholesale cost price
of each drug.
   (e) The department shall submit an invoice, not less than two
times per year, to each manufacturer for the amount of the rebate
required by subdivision (d).
   (f) Drugs may be removed from the list for failure to pay the
rebate required by subdivision (d), unless the department determines
that removal of the drug from the list would cause substantial
medical hardship to beneficiaries.
   (g) The department may adopt emergency regulations to implement
amendments to this chapter made during the 1996 portion of the
1995-96 Regular Session, in accordance with the Administrative
Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.  The initial
adoption of emergency regulations shall be deemed to be an emergency
and considered by the Office of Administrative Law as necessary for
the immediate preservation of the public peace, health and safety, or
general welfare.  Emergency regulations adopted pursuant to this
section shall remain in effect for no more than 180 days.
   (h)  Reimbursement under this chapter shall not be made for
any drugs that are available to the recipient under any other
private, state, or federal programs, or under any other contractual
or legal entitlements, except that the director may authorize an
exemption from this subdivision where exemption would represent a
cost savings to the state.   
  SEC. 12.  Section 123227 of the Health and Safety Code is amended
to read: 
   123227.  (a)  The following definitions shall apply for
purposes of this section:
   (1) "Domestic violence" means the infliction or threat of physical
harm against past or present adult or adolescent female intimate
partners, and shall include physical, sexual, and psychological abuse
against the woman, and is a part of a pattern of assaultive,
coercive, and controlling behaviors directed at achieving compliance
from or control over, that woman.
   (2) "Shelter-based" means an established system of services where
battered women and their children may be provided safe or
confidential emergency housing on a 24-hour basis, including, but not
limited to, hotel or motel arrangements, haven, and safe houses.
   (3) "Emergency shelter" means a confidential or safe location that
provides emergency housing on a 24-hour basis for battered women and
their children.  
   (b)  The Maternal and Child Health Branch of the State
Department of Health Services shall administer a comprehensive
shelter-based services grant program to battered women's shelters
pursuant to this section.  
   (b)  
   (c)  The Maternal and Child Health Branch shall administer
grants  , awarded as the result of a request for application
process,  to battered women's shelters that propose  to
maintain shelters or services previously granted funding pursuant to
this section,  to expand existing services or create new
services, and to establish new battered women's shelters to provide
services, in any of the following four areas:
   (1) Emergency shelter to women and their children escaping violent
family situations.
   (2) Transitional housing programs to help women and their children
find housing and jobs so that they are not forced to choose between
returning to a violent relationship or becoming homeless.  The
programs may offer up to 18 months of housing, case management, job
training and placement, counseling, support groups, and classes in
parenting and family budgeting.
   (3) Legal and other types of advocacy and representation to help
women and their children pursue the appropriate legal options.
   (4) Other support services for battered women  identified
by the advisory council, including, but not limited to, creative and
innovative service approaches such as community response teams
  and their children  .  
   (c)  
   (d)  In implementing the grant program pursuant to this
section, the State Department of Health Services shall consult with
an advisory council, to remain in existence until January 1, 
1996   1998  .  The council shall be composed of
not to exceed 13 voting members and two nonvoting members appointed
as follows:
   (1) Seven members appointed by the Governor.
   (2) Three members appointed by the Speaker of the Assembly.
   (3) Three members appointed by the Senate Committee on Rules.
   (4) Two nonvoting ex officio members who shall be Members of the
Legislature, one appointed by the Speaker of the Assembly and one
appointed by the Senate Committee on Rules.  Any Member of the
Legislature appointed to the council shall meet with, and participate
in the activities of, the council to the extent that participation
is not incompatible with his or her position as a Member of the
Legislature.
   The membership of the council shall consist of domestic violence
advocates, battered women service providers, and representatives of
women's organizations, law enforcement, and other groups involved
with domestic violence.  At least one-half of the council membership
shall consist of domestic violence advocates or battered women
service providers from organizations such as the California Alliance
Against Domestic Violence.
   It is the intent of the Legislature that the council membership
reflect the ethnic, racial, cultural, and geographic diversity of the
state.  
   (d)  
   (e)  The department shall collaborate closely with the
council in the development of funding priorities, the framing of the
Request for Proposals, and the solicitation of proposals.  
   (e) Administrative costs of the State Department of Health
Services incurred pursuant to the grant program shall not exceed 5
percent of the funds allocated for the program.
   (f) The shelters funded pursuant to this section shall reflect the
ethnic, racial, economic, cultural, and geographic diversity of the
state.  It  
   (f) (1) The Maternal and Child Health Branch of the State
Department of Health Services shall administer grants, awarded as the
result of a request for application process, to agencies to conduct
demonstration projects to serve battered women, including, but not
limited to, creative and innovative service approaches, such as
community response teams and pilot projects to develop new
interventions emphasizing prevention and education, and other support
projects identified by the advisory council.
   (2) For purposes of this subdivision, "agency" means a state
agency, a local government, a community-based organization, or a
nonprofit organization.
   (g) It  is the intent of the Legislature that services funded
by this program include services in underserved and 
minority   ethnic and racial  communities.  
Therefore, the Maternal and Child Health Branch of the State
Department of Health Services shall do all of the following:
   (1) Fund shelters pursuant to this section that reflect the
ethnic, racial, economic, cultural, and geographic diversity of the
state.
   (2) Target geographic areas and ethnic and racial communities of
the state whereby, based on a needs assessment, it is determined that
no shelter-based services exist or that additional resources are
necessary.
   (h) The director may award additional grants to shelter-based
agencies when it is determined that there exists a critical need for
shelter or shelter-based services.  
   (i)  As a condition of receiving funding pursuant to this
section, battered women's shelters shall  provide 
 do all of the following:
   (1) Provide  matching funds or in-kind contributions
equivalent to  10   not less than 20 
percent of the grant they would receive.  The matching funds or
in-kind contributions may come from other governmental or private
sources.  
   (h) The State Department of Health Services shall issue a Request
for Proposals and shall encumber the funds or complete negotiations
for agreements no later than May 1, 1995.  
   (2) Ensure that appropriate staff and volunteers having client
contact meet the definition of "domestic violence counselor" as
specified in subdivision (a) of Section 1037.1 of the Evidence Code.
The minimum training specified in paragraph (2) of subdivision (a)
of Section 1037.1 of the Evidence Code shall be provided to those
staff and volunteers who do not meet the requirements of paragraph
(1) of subdivision (a) of Section 1037.1 of the Evidence Code. 

  SEC. 13.  Section 123228 is added to the Health and Safety Code, to
read:
   123228.  (a) The Maternal and Child Health Branch of the State
Department of Health Services shall fund, through a competitive
selection process determined by the director, at least one agency to
provide expert technical assistance and training on domestic violence
issues and building agency capacity in order to obtain other funding
for services for battered women and their children, including, but
not limited to, grant writing and building coalitions.
   (b) The Maternal and Child Health Branch of the State Department
of Health Services shall fund at least one agency to conduct a
statewide evaluation of the services funded through Section 123277.
   (c) For purposes of subdivision (a), "agency" means a state
agency, local government, a community-based organization, or a
nonprofit agency.
   (d) Contracts awarded pursuant to this section are exempt from the
competitive bidding requirements of the Public Contract Code.
  SEC. 14.  Section 4359 of the Welfare and Institutions Code is
amended to read: 
   4359.  This chapter shall remain in effect until January 1,
 1997   2000  , and as of that date is
repealed, unless a later enacted statute enacted prior to that date
extends or deletes that date.   
  SEC. 15.  Section 4643 of the Welfare and Institutions Code, as
amended by Chapter 1 of the 1996 Fourth Extraordinary Session, is
amended to read: 
   4643.  (a) If assessment is needed, it shall be performed within
120 days following initial intake.  Assessment shall be performed
 within   as soon as possible and in no event
more than  60 days following initial intake where any delay
would expose the client to unnecessary risk to his or her health and
safety or to significant further delay in mental or physical
development, or the client would be at imminent risk of placement in
a more restrictive environment.  Assessment may include collection
and review of available historical diagnostic data, provision or
procurement of necessary tests and evaluations, and summarization of
developmental levels and service needs and is conditional upon
receipt of the release of information specified in subdivision (b)
 .  On  November   July  1, 
1996   2000  , the 120 days allowed for assessment
shall revert to 60 days and if unusual circumstances prevent the
completion of assessment within 60 days following intake, this
assessment period may be extended by one 30-day period with the
advance written approval of the department.
   (b) In determining if an individual meets the definition of
developmental disability contained in subdivision (a) of Section
4512, the regional center may consider evaluations and tests,
including, but not limited to, intelligence tests, adaptive
functioning tests, neurological and neuropsychological tests,
diagnostic tests performed by a physician, psychiatric tests, and
other tests or evaluations that have been performed by, and are
available from, other sources.  
  SEC. 16.  Section 4681.3 is added to the Welfare and Institutions
Code, to read:
   4681.3.  Notwithstanding any other provision of this article, for
the 1996-97 fiscal year, the rate schedule authorized by the
department in operation June 30, 1996, shall be increased based upon
the amount appropriated in the Budget Act of 1996 for that purpose.
The increase shall be applied as a percentage, and the percentage
shall be the same for all providers.
  SEC. 17.  Section 4776.5 is added to the Welfare and Institutions
Code, to read:
   4776.5.  (a) Regional centers shall not be subject to any
provision of law, regulation, or policy required of state agencies
pertaining to the planning and acquisition of information technology,
including personal computers, local area networks, information
technology consultation, and software.
   (b) The State Department of Developmental Services and the
Association of Regional Center Agencies shall jointly develop
guidelines for use by regional centers in the expenditure of funds
for those information system activities, including consultation and
software development, involving interface with the data bases of the
State Department of Developmental Services, including the Uniform
Fiscal System.
  SEC. 18.  Section 4791 of the Welfare and Institutions Code, as
amended by Chapter 1 of the 1996 Fourth Extraordinary Session, is
amended to read: 
   4791.  (a) The Legislature finds that  when  the state
faces an unprecedented fiscal crisis  and that  
,  the services set forth in this division are necessary to
enable persons with developmental disabilities to live in the least
restrictive setting.
   (b) In order to ensure that services to eligible consumers are
available throughout the  contract period  
fiscal year  , regional centers shall administer their contracts
within the level of funding available within the annual Budget Act.

   (c) To carry out the intent of this provision, and notwithstanding
Chapter 5 and Section 4643, each regional center contract shall
include provisions which ensure the regional center will provide
services to eligible consumers within the funds available in the
contract throughout the  contract term   fiscal
year  .  Regional centers shall implement innovative,
cost-effective methods of services delivery, which may include, but
not be limited to, the use of vouchers, consumer or parent services
coordinators, increased administrative efficiencies, and alternative
sources of payment for services.
   (d)  In the event that there is an unallocated budget
reduction in the total regional center budget during the 1992-93
fiscal year, which does not exceed forty million eight hundred
thousand dollars ($40,800,000) in the total regional center budget,
not less than 40 percent of the reduction shall be used to reduce the
regional center operations budget line item with the remainder of
the reduction applied to the regional center purchase of services
budget line item.
   (e) In the event that there is an unallocated regional center
budget reduction that exceeds forty million eight hundred thousand
dollars ($40,800,000) in the total regional center budget in the
1992-93 fiscal year the initial forty million eight hundred thousand
dollars ($40,800,000) of the reduction shall be applied pursuant to
subdivision (d) above, with the remainder of the reduction applied 25
percent to the regional center operations budget line item with the
remainder of the reduction applied to the regional center purchase of
services budget line item.
   (f) The   In the event of an unallocated reduction,
the  Budget Act of each fiscal year  from 1993-94 to
1995-96, inclusive, and through October 31, 1996,  shall
determine the distribution of any unallocated reduction within the
regional center budget item.  
   (g) On or before July 15, of each fiscal year the  
   (e) In the event of an unallocated reduction in the regional
center budget, or if an individual regional center notifies the
department that the regional center will be unable to provide
services and supports to eligible consumers throughout the fiscal
year within the level of funding available in their contract, the
following shall apply:
   (1) The  department shall provide  the regional center or
 regional centers with  guidelines, technical assistance,
and  a variety of options for reducing operations and 
service   purchase of service  costs.  
   (h)  
   (2)  Within 30 days of the enactment of the Budget Act 
or after the date a regional center notifies the department of a
projected deficit in its purchase of services budget  , each
 impacted  regional center shall develop and submit a plan
to the department describing in detail how it intends to absorb any
unallocated reduction and shall achieve savings necessary to provide
services to eligible consumers throughout the  contract term
  fiscal year  within the limitations of the funds
allocated.  Prior to adopting the plan, each regional center shall
hold a public hearing in order to receive comment on the plan.  The
regional centers shall provide notice to the community at least 10
days in advance of the public hearing.   The regional center
shall summarize and respond to the public testimony in their plan.
 
   (1)  
   (3)  The plan submitted to the department may include, but
not be limited to:
   (A) Innovative and cost-effective methods of services delivery
that include, but are not limited to, the use of vouchers; the use of
consumers and parents as service coordinators; alternative methods
of case management; the use of volunteer teams, made up of consumers,
parents, other family members, and advocates, to conduct the
monitoring activities described in Section 4648.1; increased
administrative efficiencies; alternative sources of payment for
services; use of available assessments in determining eligibility;
and alternative nonresidential rate methodologies or service delivery
models, or both.  In addition, the regional center shall take into
account, in identifying the consumer's service needs, the family's
responsibility for providing similar services to a child without
disabilities.
   (B) The maximization of all alternative funding sources, including
federal and generic funding sources.
   (C) Assurances that all other operations expenditure reductions
are considered before any reductions are made in nonsupervisory,
service coordination staff.  
   (2)  
   (4)  The regional centers shall implement components of their
plans upon approval of the department.  The department shall review
and approve, or require modification of portions of the regional
centers' plan, within 30 days of receipt of the plan.  
   (i)  
   (f)  Notwithstanding any other provision of law,  in any
fiscal year in which an unallocated reduction is made in the regional
center budget,  the  Director of Developmental Services
  director  may adopt, amend, repeal, or suspend
regulations as necessary to permit program flexibility and allow
regional centers to achieve cost savings or innovative approaches to
service delivery, including, but not limited, to those specified in
subparagraph (A) of paragraph (1) of subdivision  (g)
  (e)  without adversely affecting consumer health
and safety or placing persons with disabilities in a more restrictive
environment.  Furthermore, any such regulatory change shall not
authorize categorical reductions; changes in service delivery shall
have an exemption process.  It is the intent of the Legislature that
any such action be deemed an emergency necessary for the immediate
preservation of the public peace, health, and safety, or general
welfare for purposes of subdivision (b) of Section 11346.1 of the
Government Code.  
   (j)  
   (g)  Notwithstanding any other provision of law, the State
Director of the Department of Developmental Services may require one
or more regional centers to take any actions he or she determines to
be necessary to ensure reductions are made in the regional center
operations budget, including, but not limited to, the following:
   (1) Require a regional center to centralize billing and other
fiscal and administrative functions.
   (2) Require a regional center to reduce office space through the
decentralization of service coordinators by allowing service
coordinators to work in their homes and in community-based programs.

   (3) Require a regional center to freeze or reduce levels of pay
for administrative and managerial employees.
   (4) Require a regional center to contract for specified functions
currently conducted directly by the regional center.
   (5) Require regional centers to seek Medi-Cal provider status for
regional center staff performing reimbursable activities.  
   (k)  
   (h)  Notwithstanding any other provisions of law, the
director may terminate a regional center contract if he or she
determines that the regional center is unable or unwilling to make
the necessary reductions in its operations budget or if the action is
necessary to avoid reductions in the purchase of services for
regional center consumers.  
   (l)  
   (i)  Notwithstanding any other provisions of law, the
department may directly operate a regional center after the
termination of a contract.  
   (m)  
   (j)  If the director determines that regional centers cannot
provide services throughout the  contract term  
fiscal year  within the funds provided by the Budget Act, he or
she shall immediately report to the Governor and the appropriate
fiscal committees of the Legislature and recommend actions to secure
additional funds or reduce expenditures, including any actions which
require the suspension of the entitlement to service set forth in
this division.  
   (n)  
   (k)  Developing and implementing the plan shall be considered
a contractual obligation pursuant to Section 4635 of the Welfare and
Institutions Code.  Accordingly, the department shall make
reasonable efforts to assist regional centers in fulfilling their
                                             contractual obligations
and provide technical assistance, as necessary.  In addition, a
regional center's failure to develop and implement the plan may be
considered grounds for contract termination or nonrenewal.  If at any
time the director of the department determines that a regional
center's plan does not adequately address a funding deficiency during
the  contract period   fiscal year  , the
director may require the use of operational funds to reduce the
deficiency in purchase of services funds.  
   (o)  
   (l) This section shall become inoperative on July 1, 2000, and, as
of January 1, 2001, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2001, deletes or
extends the dates on which it becomes inoperative and is repealed.
  This section shall remain operative only until
November 1, 1996, shall remain in effect only until January 1, 1997,
and as of that date is repealed, unless a later enacted statute,
which is enacted before January 1, 1997, deletes or extends that
date.  
  SEC. 19.  Section 5778 of the Welfare and Institutions Code is
amended to read: 
   5778.  (a) This section shall be limited to mental health services
reimbursed through a fee-for-service payment system.
   (b) During the initial phases of the implementation of this part,
as determined by the department, the mental health plan contractor
and subcontractors shall submit claims under the Medi-Cal program for
eligible services on a fee-for-service basis.
   (c) A qualifying county may elect, with the approval of the
department, to operate under the requirements of a capitated,
integrated service system field test pursuant to Section 5719.5
rather than this part, in the event the requirements of the two
programs conflict.  A county that elects to operate under that
section shall comply with all other provisions of this part that do
not conflict with that section.
   (d) (1) No sooner than October 1, 1994, state matching funds for
Medi-Cal fee-for-service acute psychiatric inpatient services, and
associated administrative days, shall be transferred to the
department.  No later than July 1,  1996   1997
 , upon agreement between the department and the State
Department of Health Services, state matching funds for the remaining
Medi-Cal fee-for-service mental health services and the state
matching funds associated with field test counties under Section
5719.5 shall be transferred to the department.
   (2) The State Department of Mental Health, in consultation with
the State Department of Health Services, a statewide organization
representing counties, and a statewide organization representing
health maintenance organizations shall develop a timeline for the
transfer of funding and responsibility for fee-for-service mental
health services from Medi-Cal managed care plans to local mental
health plans.  In developing the timeline, the department shall
develop screening, referral, and coordination guidelines to be used
by Medi-Cal managed care plans and local mental health plans.
   (e) The department shall allocate the contracted amount at the
beginning of the contract period to the mental health plan.  The
allocated funds shall be considered to be funds of the plan that may
be held by the department.  The department shall develop a
methodology to ensure that these funds are held as the property of
the plan and shall not be reallocated by the department or other
entity of state government for other purposes.
   (f) Beginning in the fiscal year following the transfer of funds
from the State Department of Health Services, the state matching
funds for Medi-Cal mental health services shall be included in the
annual budget for the State Department of Mental Health.  The amount
included shall be based on historical cost, adjusted for changes in
the number of Medi-Cal beneficiaries and other relevant factors.
   (g) Initially, the mental health plans shall use the fiscal
intermediary of the Medi-Cal program of the State Department of
Health Services for the processing of claims for inpatient
psychiatric hospital services and may be required to use that fiscal
intermediary for the remaining mental health services.  The providers
for other Short-Doyle Medi-Cal services shall not be initially
required to use the fiscal intermediary but may be required to do so
on a date to be determined by the department.  The department and its
mental health plans shall be responsible for the initial incremental
increased matching costs of the fiscal intermediary for claims
processing and information retrieval associated with the operation of
the services funded by the transferred funds.
   (h) The mental health plans, subcontractors, and providers of
mental health services shall be liable for all federal audit
exceptions or disallowances based on their conduct or determinations.
  The mental health plan contractors shall not be liable for federal
audit exceptions or disallowances based on the state's conduct or
determinations.  The department and the State Department of Health
Services shall work jointly with mental health plans in initiating
any necessary appeals.  The State Department of Health Services may
offset the amount of any federal disallowance or audit exception
against subsequent claims from the mental health plan or
subcontractor.  This offset may be done at any time, after the audit
exception or disallowance has been withheld from the federal
financial participation claim made by the State Department of Health
Services.  The maximum amount that may be withheld shall be 25
percent of each payment to the plan or subcontractor.
   (i) The mental health plans shall have sufficient funds on deposit
with the department as the matching funds necessary for federal
financial participation to ensure timely payment of claims for acute
psychiatric inpatient services and associated administrative days.
The department and the State Department of Health Services, in
consultation with a statewide organization representing counties,
shall establish a mechanism to facilitate timely availability of
those funds.  Any funds held by the state on behalf of a plan shall
be deposited in a mental health managed care deposit fund and shall
accrue interest to the plan.  The department shall exercise any
necessary funding procedures pursuant to Section 12419.5 of the
Government Code and Sections 8776.6 and 8790.8 of the State
Administrative Manual regarding county claim submission and payment.

   (j) (1) The goal for funding of the future capitated system shall
be to develop statewide rates for beneficiary, by aid category and
with regional price differentiation, within a reasonable time period.
  The formula for distributing the state matching funds transferred
to the State Department of Mental Health for acute inpatient
psychiatric services to the participating counties shall be based on
the following principles:
   (A) Medi-Cal state General Fund matching dollars shall be
distributed to counties based on historic Medi-Cal acute inpatient
psychiatric costs for the county's beneficiaries and on the number of
persons eligible for Medi-Cal in that county.
   (B) All counties shall receive a baseline based on historic and
projected expenditures up to October 1, 1994.
   (C) Projected inpatient growth for the period October 1, 1994, to
June 30, 1995, inclusive, shall be distributed to counties below the
statewide average per eligible person on a proportional basis.  The
average shall be determined by the relative standing of the aggregate
of each county's expenditures of mental health Medi-Cal dollars per
beneficiary.  Total Medi-Cal dollars shall include both
fee-for-service Medi-Cal and Short-Doyle Medi-Cal dollars for both
acute inpatient psychiatric services, outpatient mental health
services, and psychiatric nursing facility services, both in
facilities that are not designated as institutions for mental disease
and for beneficiaries who are under 22 years of age and
beneficiaries who are over 64 years of age in facilities that are
designated as institutions for mental disease.
   (D) There shall be funds set aside for a self-insurance risk pool
for small counties.  For purposes of this subdivision, "small
counties" means counties with less than 200,000 population.
   (2) The allocation method for state funds transferred for acute
inpatient psychiatric services shall be as follows:
   (A) For the 1994-95 fiscal year, an amount equal to 0.6965 percent
of the total shall be transferred to a fund established by small
counties.  This fund shall be used to reimburse mental health plans
in small counties for the cost of acute inpatient psychiatric
services in excess of the funding provided to the mental health plan
for risk reinsurance, acute inpatient psychiatric services and
associated administrative days, or for costs associated with the
administration of these moneys.  The methodology for use of these
moneys shall be determined by the small counties, through a statewide
organization representing counties, in consultation with the State
Department of Mental Health.
   (B) The balance of the transfer amount for the 1994-95 fiscal year
shall be allocated to counties based on the following formula:


           County                                Percentage
           Alameda ..........................        3.5991
           Alpine ...........................         .0050
           Amador ...........................         .0490
           Butte ............................         .8724
           Calaveras ........................         .0683
           Colusa ...........................         .0294
           Contra Costa .....................        1.5544
           Del Norte ........................         .1359
           El Dorado ........................         .2272
           Fresno ...........................        2.5612
           Glenn ............................         .0597
           Humboldt .........................         .1987
           Imperial .........................         .6269
           Inyo .............................         .0802
           Kern .............................        2.6309
           Kings ............................         .4371
           Lake .............................         .2955
           Lassen ...........................         .1236
           Los Angeles ......................       31.3239
           Madera ...........................         .3882
           Marin ............................        1.0290
           Mariposa .........................         .0501
           Mendocino ........................         .3038
           Merced ...........................         .5077
           Modoc ............................         .0176
           Mono .............................         .0096
           Monterey .........................         .7351
           Napa .............................         .2909
           Nevada ...........................         .1489
           Orange ...........................        8.0627
           Placer ...........................         .2366
           Plumas ...........................         .0491
           Riverside ........................        4.4955
           Sacramento .......................        3.3506
           San Benito .......................         .1171
           San Bernardino ...................        6.4790
           San Diego ........................       12.3128
           San Francisco ....................        3.5473
           San Joaquin ......................        1.4813
           San Luis Obispo ..................         .2660
           San Mateo ........................         .0000
           Santa Barbara ....................         .0000
           Santa Clara ......................        1.9284
           Santa Cruz .......................        1.7571
           Shasta ...........................         .3997
           Sierra ...........................         .0105
           Siskiyou .........................         .1695
           Solano ...........................         .0000
           Sonoma ...........................         .5766
           Stanislaus .......................        1.7855
           Sutter/Yuba ......................         .7980
           Tehama ...........................         .1842
           Trinity ..........................         .0271
           Tulare ...........................        2.1314
           Tuolumne .........................         .2646
           Ventura ..........................         .8058
           Yolo .............................         .4043

   (k) The allocation method for the state funds transferred for
subsequent years for acute inpatient psychiatric and other mental
health services shall be determined by the State Department of Mental
Health in consultation with a statewide organization representing
counties.
   (l) The allocation methodologies described in this section shall
only be in effect while federal financial participation is received
on a fee-for-service reimbursement basis.  When federal funds are
capitated, the State Department of Mental Health, in consultation
with a statewide organization representing counties, shall determine
the methodology for capitation consistent with federal requirements.

   (m) The formula that specifies the amount of state matching funds
transferred for the remaining Medi-Cal fee-for-service mental health
services shall be determined by the department in consultation with a
statewide organization representing counties.  This formula shall
only be in effect while federal financial participation is received
on a fee-for-service reimbursement basis.
   (n) Upon the transfer of funds from the budget of the State
Department of Health Services to the department pursuant to
subdivision (d), the department shall assume the applicable program
oversight authority formerly provided by the State Department of
Health Services, including, but not limited to, the oversight of
utilization controls as specified in Section 14133.  The mental
health plan shall include a requirement in any subcontracts that all
inpatient subcontractors maintain necessary licensing and
certification.  Mental health plans shall require that services
delivered by licensed staff are within their scope of practice.
Nothing in this part shall prohibit the mental health plans from
establishing standards that are in addition to the minimum federal
and state requirements, provided that these standards do not violate
federal and state Medi-Cal requirements and guidelines.
   (o) Subject to federal approval and consistent with state
requirements, the mental health plan may negotiate rates with
providers of mental health services.
   (p) Under the fee-for-service payment system, any excess in the
payment set forth in the contract over the expenditures for services
by the plan shall be spent for the provision of mental health
services and related administrative costs.
   (q) Nothing in this part shall limit the mental health plan from
being reimbursed appropriate federal financial participation for any
qualified services even if the total expenditures for service exceeds
the contract amount with the Department of Mental Health.  Matching
nonfederal public funds shall be provided by the plan for the federal
financial participation matching requirement.   
  SEC. 20.  Section 6600.05 is added to the Welfare and Institutions
Code, to read:
   6600.05.  It is the intent of the Legislature that persons
committed to a secure facility for mental health treatment pursuant
to Section 6600 shall be placed at Atascadero State Hospital in the
1996-97 fiscal year unless there are unique circumstances that would
preclude the placement of a person at that facility.
  SEC. 21.  Section 7200.05 is added to the Welfare and Institutions
Code, to read:
   7200.05.  It is the intent of the Legislature that not more than
227 patients whose placement has been required pursuant to provisions
of the Penal Code shall be placed in Metropolitan State Hospital in
the 1996-97 fiscal year.
  SEC. 22.  Section 14005.21 of the Welfare and Institutions Code is
amended to read: 
   14005.21.  (a) Any medically needy aged, blind, or disabled person
who was categorically needy under this chapter on the basis of
eligibility under Chapter 3 (commencing with Section 12000) or
Subchapter 16 (commencing with Section 1381) of Chapter 7 of Title 42
of the United States Code for the month of August 1993, and was
discontinued as of September 1, 1993, and who, but for the addition
of Section 12200.015, would be eligible to receive benefits without a
share of cost in September 1993 under this chapter, shall remain
eligible to receive benefits without a share of cost under this
chapter as if that person were categorically needy as long as he or
she meets other applicable requirements.
   (b) Any medically needy aged, blind, or disabled person who was
eligible for benefits under this chapter as categorically needy or
medically needy under subdivision (a) for the month of August 1994,
shall not be responsible for paying his or her share of cost if he or
she had that eligibility for benefits without a share of cost
interrupted or terminated by the addition of Section 12200.017, and
if he or she, but for Section 12200.017, would be eligible to
continue receiving benefits under this chapter without a share of
cost.
   (c) Any medically needy aged, blind, or disabled person who was
eligible for benefits under this chapter as categorically needy, or
as medically needy under subdivision (a) or (b), for the calendar
month immediately preceding the date that the reductions in maximum
aid payments for the state supplementary program established in
Chapter 3 (commencing with Section 12000) of Part 3 of Division 9
made in the 1995-96 Regular Session of the Legislature are effective
shall not be responsible for paying his or her share of cost if he or
she had that eligibility for benefits without a share of cost
interrupted or terminated by the reductions in maximum aid payments,
and if he or she, but for the reductions, would be eligible to
continue receiving benefits under this chapter without a share of
cost.
   (d)  Any medically needy aged, blind, or disabled person who
was eligible for benefits under this chapter as categorically needy,
or as medically needy under subdivisions (a), (b), or (c) for the
calendar month immediately preceding the date that the reductions in
maximum aid payments for the state supplementary program established
in Chapter 3 (commencing with Section 12000) made in the 1996 portion
of the 1995-96 Regular Session of the Legislature are effective
shall not be responsible for paying his or her share of cost if he or
she had that eligibility for benefits without a share of cost
interrupted or terminated by the reductions in maximum aid payments,
and if he or she, but for these reductions, would be eligible to
continue receiving benefits under this chapter without a share of
cost.
   (e)  The department shall implement this section regardless
of the availability of federal financial participation for the share
of cost paid from state funds pursuant to subdivisions (a), (b),
 and  (c)  , and (d)  .   
  SEC. 23.  Section 14005.8 of the Welfare and Institutions Code is
amended to read: 
   14005.8.  (a) (1) To the extent required by  subchapter
  Subchapter  XIX (commencing with Section 1396) of
Chapter 7 of Title 42 of the United States Code and regulations
adopted pursuant thereto, a family who was receiving aid pursuant to
a state plan approved under Part A of Subchapter IV (commencing with
Section 601) of Title 42 of the United States Code in at least three
of the six months immediately preceding the month in which that
family became ineligible for that assistance due to increased hours
of employment, income from employment, or the loss of earned income
disregards, shall remain eligible for health care services as
provided in this chapter during the immediately succeeding six-month
period.
   (2) The department shall terminate extensions of health care
services authorized by paragraph (1) as required under federal law.
   (b) The department shall notify persons eligible under subdivision
(a) of their right to continued health care services for each
six-month period and a description of their reporting requirement,
and the circumstances under which the extension may be terminated.
The notice shall also include a Medi-Cal card or other evidence of
entitlement to those services.
   (c) Notwithstanding any other provision of this section, the
department, in conformance with federal law, shall offer
beneficiaries covered under subdivision (a) the option of remaining
eligible for health care services provided in this chapter for an
additional extension period of six months. Health services shall be
continued in as automatic a manner as permitted by federal law, and
without any unnecessary paperwork.
   (d) During the initial extension period and any additional
six-month extension period, the department, consistent with federal
law, may, whenever the department determines it to be cost-effective,
elect to pay a family's expenses for premiums, deductibles,
coinsurance, or similar costs for health insurance or other health
coverage offered by an employer of the caretaker relative or by an
employer of the absent parent of the dependent child.  If, during the
additional six-month extension period, the department elects to pay
health premiums and this coverage exists, the beneficiary may be
given the opportunity to express his or her preference between
continuing the Medi-Cal coverage or obtaining health insurance.
   (e) During the additional six-month extension period, the
department may impose a premium for the health insurance or other
health coverage consistent with Title XIX of the federal Social
Security Act (42 U.S.C. Sec. 1396 et seq.) if the department
determines that the imposition of a premium is cost-effective.
   (f) The department shall adopt emergency regulations in order to
comply with mandatory provisions of Title XIX of the federal Social
Security Act (42 U.S.C. Sec. 1396 et seq.) for extension of medical
assistance.  These regulations shall become effective immediately
upon filing with the Secretary of State.
   (g) This section shall become operative April 1, 1990.  
   (h) This section shall become inoperative only if, and commencing
on the date that, the director executes a declaration, that shall be
retained by the director, stating that any federal approval required
for federal financial participation in the provision of transitional
Medi-Cal benefits pursuant to Section 14005.81, as added during the
1996 portion of the 1995-96 Regular Session, has been obtained, and
shall remain inoperative until Section 14005.81 is repealed or the
director executes a declaration, that shall be retained by the
director, stating that federal financial participation has been
withdrawn, whichever occurs first.   
  SEC. 24.  Section 14005.81 is added to the Welfare and Institutions
Code, to read:
   14005.81.  (a) (1) To the extent required by Subchapter XIX
(commencing with Section 1396) of Chapter 7 of Title 42 of the United
States Code and regulations adopted pursuant to that subchapter, a
family who was receiving aid pursuant to a state plan approved under
Part A (commencing with Section 601) of Subchapter IV of Title 42 of
the United States Code in at least three of the six months
immediately preceding the month in which that family became
ineligible for that assistance due to increased hours of employment,
income from employment, or the loss of earned income disregards,
shall remain eligible for health care services as provided in this
chapter during the immediately succeeding 6-month period.
   (2) The department shall terminate extensions of health care
services authorized by paragraph (1) as required under federal law.
   (b) The department shall notify each person eligible under
subdivision (a) of his or her right to continued health care services
for each 6-month period, and shall provide him or her with a
description of his or her reporting obligation, and the circumstances
under which the extension may be terminated.  The notice shall also
include a Medi-Cal card or other evidence of entitlement to those
services.
   (c) Notwithstanding any other provision of this section, the
department, in conformance with federal law, shall offer
beneficiaries covered under this subdivision (a) the option of
remaining eligible for health care services provided in this chapter
for up to three additional extension periods of six months each.
   (d) Health services shall be continued in as automatic a manner as
permitted by federal law, and without any unnecessary paperwork.
   (e) During the initial extension period and any additional 6-month
extension period, the department, consistent with federal law, may,
whenever the department determines it to be cost effective, elect to
pay a family's expenses for premiums, deductibles, coinsurance, or
similar costs for health insurance or other health coverage offered
by an employer of the caretaker relative or by an employer of the
absent parent of the dependent child.  If, during any additional
6-month extension period, the department elects to pay health
premiums and this coverage exists, the beneficiary may be given the
opportunity to express his or her preference between continuing the
Medi-Cal coverage or obtaining health insurance.
   (f) During any additional 6-month extension period, the department
may impose a premium for the health insurance or other health
coverage consistent with Title XIX of the federal Social Security Act
(Subchapter XIX (commencing with Section 1396) of
                            Chapter 7 of Title 42 of the United
States Code) if the department determines that the imposition of a
premium is cost effective.
   (g) The department shall, in accordance with the Administrative
Procedure Act, Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code, adopt emergency
regulations in order to comply with the requirement set forth in this
section for extension of medical assistance.  These regulations
shall become effective immediately upon filing with the Secretary of
State.
   (h) No later than October 1, 1996, the director shall seek
approval from the United States Department of Health and Human
Services for federal financial participation in the implementation of
this section.
   (i) This section shall become operative only if, and to the extent
that, the director executes a declaration that shall be retained by
the director, stating that any necessary federal approvals have been
obtained and that federal financial participation under Title XIX of
the federal Social Security Act, if applicable, has been approved.
  SEC. 25.  Section 14005.85 of the Welfare and Institutions Code is
amended to read: 
   14005.85.  (a) Families who, because of marriage or because
separated spouses reunite, lose AFDC eligibility under the chapter
because the family no longer meets the need requirement specified in
Section 11250 or has increased assets or income, or both, shall be
eligible for extended medical benefits as specified under 
Section 14005.8   this article for a period not to
exceed 12 months  .
   (b) The department shall seek all federal waivers necessary to
implement this section.
   (c) This section shall not be implemented until the director has
executed a declaration, that shall be retained by the director, that
any necessary waivers and federal financial participation have been
obtained.   
  SEC. 26.  Section 14021.6 of the Welfare and Institutions Code is
amended to read: 
   14021.6.  (a) Subject to the requirements of federal law, the
maximum allowable rates for the Medi-Cal Drug Treatment Program shall
be determined by computing the median rate from available cost data
by modality from the fiscal year that is two years prior to the year
for which the rate is being established.
   (b)  Utilizing the criteria in subdivision (a), the
department shall develop individual and group rates for extensive
counseling for outpatient drug free treatment, based on a 50-minute
individual or a 90-minute group hour, not to exceed the total rate
established for outpatient drug free services.  The per person group
rate shall be established as a fraction of the group rate.
   (c)   Notwithstanding subdivision (a), for the
1996-97 fiscal year, the rates for nonperinatal outpatient methadone
maintenance services shall be set at the rate established for the
1995-96 fiscal year.
   (c) Notwithstanding subdivision (a), the maximum allowable rate
for group outpatient drug free services shall be set on a per person
basis.  A group shall consist of a minimum of four and a maximum of
ten individuals, at least one of which shall be a Medi-Cal eligible
beneficiary.
   (d) The department shall develop individual and group rates for
extensive counseling for outpatient drug free treatment, based on a
50 minute individual or a 90 minute group hour, not to exceed the
total rate established for subdivision (c).
   (e)  The department may adopt regulations as necessary to
implement subdivisions (a) and (b), or to implement cost containment
procedures.  These regulations may be adopted as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
The adoption of these emergency regulations shall be deemed an
emergency necessary for the immediate preservation of the public
peace, health and safety, or general welfare.   
  SEC. 27.  Section 14087.305 is added to the Welfare and
Institutions Code, to read:
   14087.305.  (a) In areas specified by the director for expansion
of the Medi-Cal managed care program under 14087.3 and where the
department is contracting with prepaid health plans or with prepaid
health plans that are contracting with, governed, owned, or operated
by a county board of supervisors, a county special commission or
county health authority authorized by Section 14018.7, 14087.31,
14087.35, 14087.36, 14087.38, and 14087.96, the department shall
exclude the Medi-Cal hospice benefit from the list of covered
services for which it contracts.
   (b) This section shall not apply to managed care contracts signed
or in place on July 1, 1996, and any contract in the 12 expansion
counties. Medi-Cal beneficiaries eligible for the hospice benefit,
and who elect the benefit, shall be provided with the name, address,
and telephone number of each licensed hospice provider in their
geographic area.
   (c) The name, address, and telephone number of each participating
hospice shall be made available by contacting the health care options
contractor or the health care plan.
   (d) Each beneficiary or eligible appliant electing the benefit
shall be informed that if he or she fails to make a choice, he or she
shall be assigned to, and enrolled in a hospice.
   (e) This section shall become inoperative on July 1, 1997, and, as
of January 1, 1998, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 1998, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 28.  Section 14105.31 of the Welfare and Institutions Code is
amended to read: 
   14105.31.  For purposes of the Medi-Cal contract drug list, the
following definitions shall apply:
   (a) "Single-source drug" means a drug that is produced and
distributed under an original New Drug Application approved by the
federal Food and Drug Administration.  This shall include a drug
marketed by the innovator manufacturer and any cross-licensed
producers or distributors operating under the New Drug Application,
and shall also include a biological product, except for vaccines,
marketed by the innovator manufacturer and any cross-licensed
producers or distributors licensed by the federal Food and Drug
Administration pursuant to Section 262 of Title 42 of the United
States Code.  A drug ceases to be a single-source drug when the same
drug in the same dosage form and strength manufactured by another
manufacturer is approved by the federal Food and Drug Administration
under the provisions for an Abbreviated New Drug Application.
   (b) "Best price" means the negotiated price, or the manufacturer's
lowest price available to any class of trade organization or entity,
including, but not limited to, wholesalers, retailers, hospitals,
repackagers, providers, or governmental entities within the United
States, that contracts with a manufacturer for a specified price for
drugs, inclusive of cash discounts, free goods, volume discounts,
rebates, and on- or off-invoice discounts or credits, shall be based
upon the manufacturer's commonly used retail package sizes for the
drug sold by wholesalers to retail pharmacies.
   (c) "Equalization payment amount" means the amount negotiated
between the manufacturer and the department for reimbursement by the
manufacturer, as specified in the contract.  The equalization payment
amount shall be based on the difference between the manufacturer's
direct catalog price charged to wholesalers and the manufacturer's
best price, as defined in subdivision (b).
   (d) "Manufacturer" means any person, partnership, corporation, or
other institution or entity that is engaged in the production,
preparation, propagation, compounding, conversion, or processing of
drugs, either directly or indirectly by extraction from substances of
natural origin, or independently by means of chemical synthesis, or
by a combination of extraction and chemical synthesis, or in the
packaging, repackaging, labeling, relabeling, and distribution of
drugs.
   (e) "Price escalator" means a mutually agreed upon price specified
in the contract, to cover anticipated cost increases over the life
of the contract.
   (f) "Medi-Cal pharmacy costs" or "Medi-Cal drug costs" means all
reimbursements to pharmacy providers for services or merchandise,
including single-source or multiple-source prescription drugs,
over-the-counter medications, and medical supplies, or any other
costs billed by pharmacy providers under the Medi-Cal program.
   (g) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 29.  Section 14105.33 of the Welfare and Institutions Code is
amended to read: 
   14105.33.  (a) The department may enter into contracts with
manufacturers of single-source and multiple-source drugs, on a bid or
nonbid basis, for drugs from each major therapeutic category, and
shall maintain a list of those drugs for which contracts have been
executed.  It is the intent of the Legislature that, in the
implementation of this section during the  1992-93 
 1996-97  fiscal year, the director negotiate as
aggressively as necessary to achieve the savings related to
pharmaceutical contracting identified in the Budget Act of 
1992 (Chapter 587 of the Statutes of 1992)   1996 
.
   (b) (1) Contracts executed pursuant to this section shall be for
the manufacturer's best price, as defined in Section 14105.31, which
shall be specified in the contract, and subject to agreed upon price
escalators, as defined in that section.  The contracts shall provide
for an equalization payment amount, as defined in Section 14105.31,
to be remitted to the department quarterly.  The department shall
submit an invoice to each manufacturer for the equalization payment
amount, based on utilization data from the department's prescription
drug paid claims tapes.  The drugs of any manufacturer with an
existing contract that does not execute a contract amendment with the
department within 60 days of the effective date of the amendment of
this section enacted in 1992, pursuant to the requirements of this
subdivision as amended, or a manufacturer without an existing
contract that does not execute a contract with the department within
60 days of the effective date of this amendment of this section
enacted in 1992, pursuant to the requirements of this subdivision as
amended, shall be available to Medi-Cal beneficiaries only through
prior authorization.
   (2) The department shall provide for an annual audit of
utilization data used to calculate the equalization amount to verify
the accuracy of that data.  The findings of the audit shall be
documented in a written audit report to be made available to
manufacturers within 90 days of receipt of the report from the
auditor.  Any manufacturer may receive a copy of the audit report
upon written request.  Contracts between the department and
manufacturers shall provide for any equalization payment adjustments
determined necessary pursuant to an audit.
   (3) Utilization data used to determine an equalization payment
amount shall exclude data from both of the following:
   (A) Health maintenance organizations, as defined in Section 300e
(a) of Title 42 of the United States Code, including those
organizations that contract under Section 1396b(m) of Title 42 of the
United States Code.
   (B) Capitated plans that include a prescription drug benefit in
the capitated rate, and that have negotiated contracts for rebates or
discounts with manufacturers.
   (c) In order that Medi-Cal beneficiaries may have access to a
comprehensive range of therapeutic agents, the department shall
ensure that there is representation on the list of contract drugs in
all major therapeutic categories.  Except as provided in subdivision
(a) of Section 14105.35, the department shall not be required to
contract with all manufacturers who negotiate for a contract in a
particular category.  The department shall ensure that there is
sufficient representation of single-source and multiple-source drugs,
as appropriate, in each major therapeutic category.
   (d) (1) The department shall select the therapeutic categories to
be included on the list of contract drugs, and the order in which it
seeks contracts for those categories.  The department may establish
different contracting schedules for single-source and multiple-source
drugs within a given therapeutic category.
   (2) The department shall make every attempt to complete the
initial contracting process for each major therapeutic category by
January 1,  1997   1999  .
   (e) (1) In order to fully implement subdivision (d), the
department shall, to the extent necessary, negotiate or renegotiate
contracts to ensure there are as many single-source drugs within each
therapeutic category or subcategory as the department determines
necessary to meet the health needs of the Medi-Cal population.  The
department may determine in selected therapeutic categories or
subcategories that no single-source drugs are necessary because there
are currently sufficient multiple-source drugs in the therapeutic
category or subcategory on the list of contract drugs to meet the
health needs of the Medi-Cal population.  However, in no event shall
a beneficiary be denied continued use of a drug which is part of a
prescribed therapy in effect as of September 2, 1992, until the
prescribed therapy is no longer prescribed.
   (2) In the development of decisions by the department on the
required number of single-source drugs in a therapeutic category or
subcategory, and the relative therapeutic merits of each drug in a
therapeutic category or subcategory, the department shall consult
with the Medi-Cal Contract Drug Advisory Committee.  The committee
members shall communicate their comments and recommendations to the
department within  10   30  business days
of a request for consultation, and shall disclose any associations
with pharmaceutical manufacturers or any remuneration from
pharmaceutical manufacturers.
   (3) In order to expedite implementation of paragraph (1), the
requirements of Sections 14105.37, 14105.38, subdivisions (a), (c),
(e), and (f) of Sections 14105.39, 14105.4, and 14105.405 are waived
for the purposes of this section until January 1, 1994.
   (f) In order to achieve maximum cost savings, the Legislature
declares that an expedited process for contracts under this section
is necessary. Therefore, contracts entered into on a nonbid basis
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.
   (g) In no event shall a beneficiary be denied continued use of a
drug that is part of a prescribed therapy in effect as of September
2, 1992, until the prescribed therapy is no longer prescribed.
   (h) Contracts executed pursuant to this section shall be
confidential and shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
   (i) The department shall provide individual notice to Medi-Cal
beneficiaries at least 60 calendar days prior to the effective date
of the deletion or suspension of any drug from the list of contract
drugs.  The notice shall include a description of the beneficiary's
right to a fair hearing and shall encourage the beneficiary to
consult a physician to determine if an appropriate substitute
medication is available from Medi-Cal.
   (j) In carrying out the provisions of this section, the department
may contract either directly, or through the fiscal intermediary,
for pharmacy consultant staff necessary to initially accomplish the
treatment authorization request reviews.   This authority
shall extend for a maximum of 18 months from the date of the initial
contract. 
   (k) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1, 1997   1999  , deletes or
extends that date.   
  SEC. 30.  Section 14105.335 is added to the Welfare and
Institutions Code, to read:
   14105.335.  (a) Effective July 1, 1996, all pharmaceutical
manufacturers shall provide the department a supplemental 10 percent
rebate in addition to rebates pursuant to other provisions of state
or federal law, less any state supplemental rebate currently provided
under separate state agreements.  The supplemental rebate required
under this section shall be required for each prescription drug
reimbursed through the Medi-Cal program. This supplemental rebate
shall be calculated as 10 percent of the manufacturer's average
manufacturer price, as that term is defined in the manufacturer's
contract with the Health Care Financing Administration pursuant to
Section 1927 of the Social Security Act (42 U.S.C. 1396r-8).
Products that have been added to the Medi-Cal list of contract drugs
pursuant to Section 14105.43 or 14133.2 do not require a supplemental
rebate.
   (b) Until such time as a manufacturer executes a contract or
contract amendment for the rebates required by subdivision (a), all
of that manufacturer's drugs and drug products shall be available to
Medi-Cal beneficiaries only through prior authorization.
   (c) In carrying out this section, the department may contract
either directly, or through the fiscal intermediary, for pharmacy
consultant staff necessary to accomplish the treatment authorization
request reviews.  This authority shall extend until January 1, 1997.

   (d) For any drug placed on prior authorization pursuant to
subdivision (b), the procedural and notification requirements
described in subdivision (i) of Section 14105.33, Sections 14105.37
and 14105.38, subdivisions (a), (c), (e), and (f) of Section
14105.39, and Sections 14105.4 and 14105.405 are waived for the
purposes of this section.
   (e) This section shall remain in effect only until January 1,
1997, and as of that date, is repealed, unless a later enacted
statute that is enacted on or before January 1, 1997, deletes or
extends that date.
  SEC. 31.  Section 14105.35 of the Welfare and Institutions Code is
amended to read: 
   14105.35.  (a) (1) On and after July 1, 1990, drugs included on
the Medi-Cal drug formulary shall be included on the list of contract
drugs until the department and the manufacturer have concluded
contract negotiations or the department suspends the drug from the
list of contract drugs pursuant to the provisions of this
subdivision.
   The department shall, in writing, invite any manufacturer with
single-source drug products on the formulary as of July 1, 1990, to
enter into negotiations relative to the retention of its drug or
drugs.  As to the issue of cost, the department shall accept the
manufacturer's best price as sufficient for purposes of entering into
a contract to retain the drug or drugs on the list of contract
drugs.
   If the department and a manufacturer enter into a contract for
retention of a drug or drugs on the list of contract drugs, the drug
or drugs shall be retained on the list of contract drugs for the
effective term of the contract.
   If a manufacturer refuses to enter into negotiations with the
department pursuant to this subdivision, or if after 30 days of
negotiation, the manufacturer has not agreed to execute a contract
for a drug at the manufacturer's best price, the department may
suspend from the list of contract drugs the manufacturer's
single-source drug in question for a period of at least 180 days.
The department shall lift the suspension upon execution of a contract
for that drug.  Consistent with the provisions of this section, the
department shall delete the Medi-Cal drug formulary specified in
paragraphs (b), (c), (d), and (e) of Section 59999 of Title 22 of the
California Code of Regulations.
   (2) On and after July 1, 1990, the director may retain a drug on
the Medi-Cal list of contract drugs even if no contract is executed
with a manufacturer, if the director determines that an essential
need exists for that drug, and there are no other drugs currently on
the formulary that meet that need.
   (3) The director may delete a drug from the list of contract drugs
if the director determines that the drug presents problems of safety
or misuse.  The director's decision as to safety shall be based upon
published medical literature, and the director's decision as to
misuse shall be based on published medical literature and claims data
supplied by the fiscal intermediary.
   (b) Any reference to the Medi-Cal drug formulary by statute or
regulation shall be construed as referring to the list of contract
drugs.
   (c) (1) Any drug in the process of being added to the formulary by
contract agreement pursuant to Section 14105.3, executed prior to
the effective date of this section, shall be added to the list of
contract drugs.
   (2) Contracts pursuant to Section 14105.3 executed prior to
January 1, 1991, shall be considered to be contracts executed
pursuant to Section 14105.33, and the department shall exempt the
drugs included in these contracts from the initial therapeutic
category review in which they would normally be considered.
   (3) Nothing in this section shall be construed to require the
department to discontinue negotiations into which it has entered with
any manufacturer as of the effective date of this section.
Contracts entered into as a result of these negotiations shall be
exempt from the initial therapeutic category review in which they
would normally be considered.
   (d) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 32.  Section 14105.37 of the Welfare and Institutions Code is
amended to read: 
   14105.37.  (a) The department shall notify each manufacturer of
drugs in therapeutic categories selected pursuant to Section 14105.33
of the provisions of Sections 14105.31 to 14105.42, inclusive.
   (b) If, within  30   45  days of
notification, a manufacturer does not enter into negotiations for a
contract pursuant to those sections, the department may suspend or
delete from the list of contract drugs, or refuse to consider for
addition, drugs of that manufacturer in the selected therapeutic
categories.
   (c) If, after  120   150  days from the
initial notification, a contract is not executed for a drug currently
on the list of contract drugs, the department may suspend or delete
the drug from the list of contract drugs.
   (d) If, within  120   150  days from the
initial notification, a contract is executed for a drug currently on
the list of contract drugs, the department shall retain the drug on
the list of contract drugs.
   (e) If, within  120   150  days from the
date of the initial notification, a contract is executed for a drug
not currently on the list of contract drugs, the department shall add
the drug to the list of contract drugs.
   (f) The department shall terminate all negotiations  120
  150  days after the initial notification.
   (g) The department may suspend or delete any drug from the list of
contract drugs at the expiration of the contract term or when the
contract between the department and the manufacturer of that drug is
terminated.
   (h) Any drug suspended from the list of contract drugs pursuant to
this section or Section 14105.35 shall be subject to prior
authorization, as if that drug were not on the list of contract
drugs.
   (i) Any drug suspended from the list of contract drugs pursuant to
this section or Section 14105.35 for at least 12 months may be
deleted from the list of contract drugs in accordance with the
provisions of Section 14105.38.
   (j) This section shall remain in effect only until January 1,
1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 33.  Section 14105.38 of the Welfare and Institutions Code is
amended to read: 
   14105.38.  (a) (1) In the event the department determines a drug
should be deleted from the list of contract drugs, the department
shall conduct a public hearing, as provided in this section, to
receive comment on the impact of removing the drug.
   (2) (A) The department shall provide written notice 30 days prior
to the hearing.
   (B) The department shall send the notice required by this
subdivision to the manufacturer of the drug proposed to be deleted
and to organizations representing Medi-Cal beneficiaries.
   (b) (1) The hearing panel shall consist of the Chief, Medi-Cal
Drug Discount Program, who shall serve as chair, and the Medi-Cal
Contract Drug Advisory Committee.
   (2) The hearing shall be recorded and transcribed, and the
transcript available for public review.
   (3) Subsequent to hearing all public comment, and within 30 days
of the hearing, each panel member shall submit a recommendation
regarding deletion of the drug and the reason for the recommendation
to the director.
   (c) The director shall consider public comments provided at the
hearing and the recommendations of each panel member in determining
whether to delete the drug.
   (d) This section shall remain in effect only until January 1,
 1997  1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 34.  Section 14105.39 of the Welfare and Institutions Code is
amended to read: 

14105.39.  (a) (1) A manufacturer of a new single-source drug may
request inclusion of its drug on the list of contract drugs pursuant
to Section 14105.33 provided all of the following conditions are met:

   (A) The request is made within  18   12 
months of approval for marketing by the federal Food and Drug
Administration.
   (B) The manufacturer agrees to negotiate a contract with the
department to provide the drug at the manufacturer's best price.
   (C) (i) The manufacturer provides the department with necessary
information, as specified by the department, in the request.
   (ii) Notwithstanding clause (i), either of the following may be
submitted by the manufacturer in lieu of the Summary Basis of
Approval prepared by the federal Food and Drug Administration for
that drug:
   (I) The federal Food and Drug Administration's approval or
approvable letter for the drug and federal Food and Drug
Administration's approved labeling.
   (II) The federal Food and Drug Administration's medical officers'
and pharmacologists' reviews and the federal Food and Drug
Administration's approved labeling.
   (D) The department had concluded contracting for the therapeutic
category in which the drug is included prior to approval of the drug
by the federal Food and Drug Administration.
   (2) Within 90 days from receipt of the request, the department
shall evaluate the request using the criteria identified in
subdivision (d), and shall submit the drug to the Medi-Cal Contract
Drug Advisory Committee.
   (b) Any petition for the addition to or deletion of a drug to the
Medi-Cal drug formulary submitted prior to July 31, 1990, shall be
deemed to be denied.  A manufacturer who has submitted a petition
deemed denied may request inclusion of that drug on the list of
contract drugs provided all of the following conditions are met:
   (1) The manufacturer agrees to negotiate for a contract with the
department to provide the drug at the manufacturer's best price.
   (2) The manufacturer provides the department with necessary
information, as specified by the department, in the request.
   (3) The manufacturer submits the request to the department prior
to October 1, 1990.
   (c) Any new drug designated as having an important therapeutic
gain and approved for marketing by the federal Food and Drug
Administration on or after July 31, 1990, shall immediately be
included on the list of contract drugs for a period of three years
provided that all of the following conditions are met:
   (1) The manufacturer offers the department its best price.
   (2) The drug is typically administered in an outpatient setting.
   (3) The drug is prescribed only for the indications and usage
specified in the federal Food and Drug Administration approved
labeling.
   (4) The drug is determined by the director to be safe, relative to
other drugs in the same therapeutic category on the list of contract
drugs.
   (d) (1) To ensure that the health needs of Medi-Cal beneficiaries
are met consistent with the intent of this chapter, the department
shall, when evaluating a decision to execute a contract, and when
evaluating drugs for retention on, addition to, or deletion from, the
list of contract drugs, use all of the following criteria:
   (A) The safety of the drug.
   (B) The effectiveness of the drug.
   (C) The essential need for the drug.
   (D) The potential for misuse of the drug.
   (E) The cost of the drug.
   (2) The deficiency of a drug when measured by one of these
criteria may be sufficient to support a decision that the drug should
not be added or retained, or should be deleted from the list.
However, the superiority of a drug under one criterion may be
sufficient to warrant the addition or retention of the drug,
notwithstanding a deficiency in another criterion.
   (e) (1) A manufacturer of single-source drugs denied a contract
pursuant to this section or Section 14105.33 or 14105.37, may file an
appeal of that decision with the director within 30 calendar days of
the department's written decision.
   (2) Within 30 calendar days of the manufacturer's appeal, the
director shall request a recommendation regarding the appeal from the
Medi-Cal Contract Drug Advisory Committee.  The committee shall
provide its recommendation in writing, within 30 calendar days of the
director's request.
   (3) The director shall issue a final decision on the appeal within
30 calendar days of the recommendation.
   (f)  Changes   Deletions  made to the
list of contract drugs, including those made pursuant to Section
14105.37, shall become effective no sooner than 30 days after
publication of the changes in provider bulletins.
   (g) Changes made to the list of contract drugs under this or any
other section are exempt from the requirements of the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4
(commencing with Section 11370), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code), and shall not be subject to the review and approval of the
Office of Administrative Law.
   (h) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 35.  Section 14105.4 of the Welfare and Institutions Code, as
amended by Section 8 of Chapter 723 of the Statutes of 1992, is
amended to read: 
   14105.4.  (a) The director shall appoint a Medi-Cal Contract Drug
Advisory Committee for the purpose of providing scientific and
medical analysis on drugs contained on the list of contract drugs.
The duties of the committee shall be as follows:
   (1) To review drugs in the Medi-Cal list of contract drugs and
make written recommendations to the director as to the addition of
any drug or the deletion of any drug from the list.  These
recommendations shall be in accordance with subdivision (d) of
Section 14105.39.
   (2) To review and report in writing to the director as to the
comparative therapeutic effect of drugs in accordance with Section
14053.5.
   (3) To prepare a fair, impartial, and independent recommendation
in writing, regarding appeals from manufacturers made pursuant to
subdivision (e) of Section 14105.39.
   (b) The committee shall consist of at least one representative
from each of the following groups:
   (1) Physicians.
   (2) Pharmacists.
   (3) Schools of pharmacy or pharmacologists.
   (4)  Med-Cal   Medi-Cal  beneficiaries
 .
   (c) Members of the committee shall be reimbursed for necessary
travel and other expenses incurred in the performance of official
committee duties.
   (d) In order to provide sufficient scientific information and
analysis in the therapeutic categories under review, the director may
replace a representative if required for specific expertise.
   (e) The director shall notify the committee of the decisions made
on the recommendations.
   (f) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999 , deletes or
extends that date.   
  SEC. 36.  Section 14105.4 of the Welfare and Institutions Code, as
amended by Section 9 of Chapter 723 of the Statutes of 1992, is
amended to read: 
   14105.4.  (a) The department shall schedule and conduct a public
regulatory hearing to consider the addition of a drug to, or the
deletion of a drug from, the Medi-Cal drug formulary five working
days subsequent to the Medical Therapeutic and Drug Advisory
Committee meeting which shall meet at least every four months.  The
public hearing may consist of written testimony only, and the hearing
record shall be closed at the end of the public hearing.
   (b) The department shall make available 45 days prior to the
public hearing the department's estimate of any anticipated costs or
savings to the state from adding a drug product to, or deleting a
drug product from, the Medi-Cal drug formulary.
   (c) Whenever the department accepts a completed petition to add a
drug product to the Medi-Cal drug formulary and it is not processed
pursuant to Section 14105.9, it shall be scheduled for review at the
next regularly scheduled Medical Therapeutic and Drug Advisory
Committee meeting and public regulatory hearing, unless the meeting
and hearing are scheduled to occur within 120 days, in which case the
drug product may be scheduled for the following hearing.
   (d) The director shall issue a final decision regarding the drug
product and shall submit any regulation adding a drug product to, or
deleting a drug product from, the Medi-Cal drug formulary to the
Office of Administrative Law, along with the completed rulemaking
record, within seven months after the hearing prescribed in
subdivision (a).  This section shall not, however, be construed in a
manner which results in the disapproval or invalidation of a
regulation for failure to comply with the timeframes prescribed in
this subdivision and subdivisions (a) and (c).
   (e) (1) Except as provided in paragraph (2), the criteria used by
the department in deciding whether a drug product shall be added to
or deleted from the formulary shall be limited to the criteria
adopted as department regulations.  The criteria shall be specific
and unambiguous.
   (2) Notwithstanding paragraph (1), either of the following may be
submitted by the manufacturer in lieu of the Summary Basis of
Approval prepared by the federal Food and Drug Administration for
that drug:
   (A) The federal Food and Drug Administration's approval or
approvable letter for the drug and federal Food and Drug
Administration's approved labeling.
   (B) The federal Food and Drug Administration's medical officers'
and pharmacologists' reviews and the federal Food and Drug
Administration's approved labeling.
   (f) Departmental requests for information from persons filing drug
petitions to which this section applies shall be specific and
unambiguous and shall be made solely for the purpose of addressing
the criteria utilized in accordance with subdivision (e).
   (g) All published studies received by the department pursuant to a
drug petition prior to the close of the public regulatory hearing
record shall be accepted and considered by the department.
   (h) Whenever the director decides to reject a petition to add a
drug product to, or delete a drug product from, the formulary, the
director shall notify the petitioner directly and in writing
indicating the reason and specifying the criteria utilized in
reaching the decision.
   (i) The department shall accept a petition for a drug that has
been rejected by the director upon the submission of another complete
petition containing substantial new information that addresses the
reason or reasons for rejection stated by the director pursuant to
subdivision (h).  Any petition accepted pursuant to this subdivision
shall be processed in accordance with subdivision (c), or Section
14105.9, whichever is applicable.
   (j) This section shall become operative on January 1, 
1997   1999  .   
  SEC. 37.  Section 14105.405 of the Welfare and Institutions Code is
amended to read: 
   14105.405.  (a) A Medi-Cal beneficiary, within 90 days of receipt
of the director's notice to beneficiaries pursuant to subdivision (g)
of Section 14105.33, informing them of the decision to delete or
suspend a drug from the list of contract drugs, may request a fair
hearing pursuant to Chapter 7 (commencing with Section 10950) of Part
2.
   (b) Any beneficiary filing a fair hearing request regarding the
deletion or suspension of a drug from the formulary shall be granted
a treatment authorization request for that drug until a final
decision is adopted by the director.  Should the beneficiary seek
judicial review of the director's decision, a treatment authorization
request shall be granted for that drug until a final decision is
issued by the court.
   (c) (1) Any Medi-Cal beneficiary, within one year of the director'
s decision pursuant to Section 10959, may file a petition with the
superior court, under the provisions of Section 1094.5 of the Code of
Civil Procedure, praying for a review of both the legal and factual
basis for the director's decision.
   (2) The director shall be the sole respondent in these
proceedings.
   (d) Any Medi-Cal beneficiary injured as a result of being denied a
drug which is determined to be medically necessary may sue for
injunctive or declaratory relief to review the director's decision to
delete or suspend a drug from the list of contract drugs.
   (e) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 38.  Section 14105.41 of the Welfare and Institutions Code, as
amended by Section 11 of Chapter 723 of the Statutes of 1992, is
amended to read: 
   14105.41.  (a) Moneys accruing to the department from contracts
executed pursuant to Section 14105.33 shall be deposited in the
Health Care Deposit Fund, and shall be subject to appropriation by
the Legislature.
   (b) This section shall remain in effect only until January 1,
 1997   1999  , and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1,  1997   1999  , deletes or
extends that date.   
  SEC. 39.  Section 14105.41 of the Welfare and Institutions Code, as
amended by Section 97 of Chapter 938 of the Statutes of 1995, is
amended to read: 
   14105.41.  (a) For the purpose of adding drugs to, or deleting
drugs from, the Medi-Cal drug formulary as described in Section
14105.4, whether pursuant to a petition or by the department
independent of a petition, all of the requirements of the
Administrative Procedure Act contained in Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code shall be applicable except that the requirements of
subdivision (a) of Section 11340.7 and subdivision (a) of Section
11346.9 of the Government Code shall be deemed to have been complied
with if the department does all of the following:
   (1) Upon receipt of a petition requesting the addition of a drug
to, or the deletion of a drug from, the Medi-Cal drug formulary, the
department shall notify the petitioner directly and in writing of the
receipt of the petition and shall, within 30 days, either return the
petition as incomplete or schedule the petition for public hearing,
unless the public hearing is not required pursuant to Section
14105.9.
   (2) Notifies each petitioner directly and in writing of its
decision regarding the addition of a drug product to, or deletion of
a drug product from, the formulary and shall state the reason or
reasons for its decision and the specific regulatory criteria that
are the basis of the department's decision.
   (3) Prepares and submits to the Office of Administrative Law with
the adopted regulation all of the following for each drug which the
department has decided to add to, or delete from, the Medi-Cal drug
formulary:
   (A) A brief summary of the comments submitted.  For the purpose of
this section, "comments" shall mean the major points raised in
testimony which specifically address the regulatory criteria upon
which the department is authorized, pursuant to subdivision (e) of
Section 14105.4, to base a decision to add or delete a drug from the
formulary.
   (B) The recommendation of the Medical Therapeutic and Drug
Advisory Committee.
   (C) The decision of the department.
   (D) A statement of the reason and the specific regulatory criteria
that are the basis of the department's decision.
   (b) Any additional information provided to the department during
the posting of revisions to the proposed regulation shall be
responded to by the department directly and in writing to the
originator.  That response shall notify the originator whether the
additional information has resulted in a changed decision.
   (c) For the purpose of review by the court, if any, and review and
approval by the Office of Administrative Law of changes to the
Medi-Cal drug formulary adopted by the department, each drug added
to, or deleted from, the formulary shall be considered to be a
separate regulation and shall be severable from all other additions
or deletions of drugs contained in the rulemaking file.
   (d) This section shall be applicable to any Medi-Cal drug
formulary regulation package filed with the Office of Administrative
Law on or after January 1,  1997   1999  .

   (e) This section shall become operative on January 1, 
1997   1999  .   
  SEC. 40.  Section 14105.42 of the Welfare and Institutions Code, as
amended by Chapter 716 of the Statutes of 1992, is amended to read:

   14105.42.  (a) The department shall report to the Legislature
after the first three major therapeutic categories have been reviewed
and contracts executed.  The report shall include the estimated
savings, number of manufacturers entering negotiations, number of
contracts executed, number of drugs added and deleted, and impact on
Medi-Cal beneficiaries and providers.
   (b) The department shall provide the following data to the
Legislature and to the Auditor General by January 1, 1991, and every
six months thereafter:
   (1) The number of drug treatment authorization requests (TAR)
received by facsimile, by secondary answering system and in person
for each therapeutic category.
   (2) The number of drug TARS requested, approved, denied, and
returned.
   (3) The length of time between the TAR request and the decision,
specified by type of communication such as telephone or facsimile if
available.
   (4) For denied TARS, the number of fair hearings requested,
approved, denied and pending.
   (5) The numbers of providers who were unable to submit a request
or made multiple attempts because of faulty or unavailable lines of
communication, if available.
   (6) The numbers of complaints made by beneficiaries and providers
relating to difficulty or inability to obtain a TAR response.
   (7) The status of the enhancements to the TAR process specified in
Section 21 of Chapter 457 of the Statutes of 1990.
   (8) The number of calls on the TAR line which are not getting
through.
   (c) The Auditor General shall prepare a report by February 1,
1991, and every 6 months thereafter providing a summary and analysis
of the data specified in subdivision (b), and a comparative analysis
of changes in the TAR process using June 1, 1990, as a base.  The
analysis shall include a measure of increased or decreased ability to
contact the department and receive a response in a shorter or
greater period of time.
   (d)  The Bureau of State Audits shall prepare a report by
January 1, 1998, on the drug program management techniques of the
drug contracting program, and the comparability of the program to
other private sector third party payers.  In completing its report
the bureau may consult with the department, prescribing physicians,
pharmacists, drug manufacturers, representatives of beneficiaries,
and others as the bureau sees fit.
   (e)  The department shall report to the Legislature, through
the annual budget process, on the cost-effectiveness of contracts
executed pursuant to Section 14105.33.  
   (e)  
   (f)  This section shall remain in effect only until January
1, 1999, and as of that date is repealed, unless a later enacted
statute, which is enacted before January 1, 1999, deletes or extends
that date.   
  SEC. 41.  Section 14105.91 of the Welfare and Institutions Code is
amended to read: 
   14105.91.  The department may add a drug to the formulary which is
a different dosage form, or strength of a drug product which is
listed in the formulary without review by the Medical Therapeutics
and Drug Advisory Committee and the addition shall be deemed to
comply with the requirements of the California Administrative
Procedures Act.
   This section shall become operative on January 1,  1997
  1999  .   
  SEC. 42.  Section 14105.915 of the Welfare and Institutions Code is
amended to read: 
   14105.915.  The department may remove any drug from the formulary
at the expiration of the contract term or when the contract between
the department and the manufacturer of that drug is terminated.
   This section shall become operative on January 1,  1997
  1999  .   
  SEC. 43.  Section 14105.916 of the Welfare and Institutions Code is
amended to read: 
   14105.916.  Notwithstanding any other provision of law, on and
after January 1,  1997   1999  , drugs on
the Medi-Cal list of contract drugs shall become the Medi-Cal drug
formulary.   
  SEC. 43.5.  Section 14132.44 of the Welfare and Institutions Code
is amended to read: 
   14132.44.  (a) Targeted case management (TCM), pursuant to Section
1915(g) of the Social Security Act as amended by Public Law 99-272
(42 U.S.C.  Sec. 1396n(g)), shall be covered as a benefit, effective
January 1, 1995.  Nothing in this section shall be construed to
require any local governmental agency to implement TCM.
   (b) A TCM provider furnishing TCM services shall be a local
governmental agency under contract with the department to provide TCM
services.  Local educational agencies shall not be providers of case
management services under this section.
   (c) A TCM provider may contract with a nongovernmental entity or
the University of California, or both, to provide TCM services on its
behalf under the conditions specified by the department in
regulations.
   (d) Each TCM provider shall have all of the following:
   (1) Established procedures for performance monitoring.
   (2) A countywide system to prevent duplication of services and to
ensure coordination and continuity of care among providers of case
management services provided to beneficiaries who are eligible to
receive case management services from two or more programs.
   (3) A fee mechanism effective January 1, 1995, specific to TCM
services provided, which may vary by program.
   (e) A TCM service provider, a nongovernmental entity or the
University of California, or both, under contract with a TCM provider
may provide TCM services to one or all of the following groups of
Medi-Cal beneficiaries, which shall be defined in regulation:
   (1) High-risk persons.
   (2) Persons who have language or other comprehension barriers.
   (3) Persons on probation.
   (4) Persons who have exhibited an inability to handle personal,
medical, or other affairs.
   (5) Persons abusing alcohol or drugs, or both.
   (6) Adults at risk of institutionalization.
   (7) Adults at risk of abuse or neglect.
   (f) (1) A local governmental agency that elects to provide TCM
services to the groups specified in subdivision (e) shall, for each
fiscal year, for the purpose of obtaining federal medicaid matching
funds, submit an annual cost report as prescribed by the department
that certifies all of the following:
   (A) The availability and expenditure of 100 percent of the
nonfederal share for the provision of TCM services from the local
governmental agency's general fund or from any other funds allowed
under federal law and regulation.
   (B) The amount of funds expended on allowable TCM services.
   (C) Its expenditures represent costs that are eligible for federal
financial participation.
   (D) The costs reflected in the annual cost reports used to
determine TCM rates are developed in compliance with the definitions
contained in the Office of Management and Budget (OMB) Circular A-87.

   (E) Case management services provided in accordance with Section
1396n(g) of Title 42 of the United States Code will not duplicate
case management services provided under any home- and community-based
services waiver.
   (F) Claims for providing case management services pursuant to this
section will not duplicate claims made to public agencies or private
entities under other program authorities for the same purposes.
   (G) The requirements of subdivision (d) have been met.
   (2) The department shall deny any claim if it determines that any
certification required by this subdivision is not adequately
supported for purposes of federal financial participation.
   (g) Only a local governmental agency may submit TCM service claims
to the department for the performance of TCM services.
   (h) During the period from January 1, 1995, through June 30, 1995,
TCM services shall be reimbursed according to the interim mechanism
developed by the state and the Health Care Financing Administration,
which is reflected in the document entitled "Agreement Between the
Health Care Financing Administration and the State of California,
Department of Health Services." For the 1995-96 fiscal year, the
department shall establish an initial rate of reimbursement.
Effective July 1, 1996, and thereafter, TCM services shall be
reimbursed in accordance with regulations that shall be adopted by
the department.
   (i) The department, in consultation with local governmental
agencies, and consistent with federal regulations, and the State
Medicaid Manual of the Department of Health and Human Services,
Health Care Financing Administration, shall adopt regulations that
define TCM services, establish the standards under which TCM services
qualify as a Medi-Cal reimbursable service, prescribe the
methodology for determining the rate of reimbursement, and establish
a claims submission and processing system and method to certify local
matching expenditures.
   (j) (1) Notwithstanding any other provision of this section, the
state shall be held harmless, in accordance with paragraphs (2) and
(3) from any federal audit disallowance and interest resulting from
payments made by the federal medicaid program as reimbursement for
claims for providing TCM services pursuant to this section, less the
amounts already remitted to the state pursuant to subdivision (m) for
the disallowed claim.
   (2) To the extent that a federal audit disallowance and interest
results from a claim or claims for which any local governmental
agency has received reimbursement for TCM services, the department
shall recoup from the local governmental agency that submitted that
disallowed claim, through offsets or by a direct billing, amounts
equal to the amount of the disallowance and interest, in that fiscal
year, less the amounts already remitted to the state pursuant
                                               to subdivision (m) for
the disallowed claim.  All subsequent claims submitted to the
department applicable to any previously disallowed claim, may be held
in abeyance, with no payment made, until the federal disallowance
issue is resolved.
   (3) Notwithstanding paragraphs (1) and (2), to the extent that a
federal audit disallowance and interest results from a claim or
claims for which the local governmental agency has received
reimbursement for TCM services performed by a nongovernmental entity
or the University of California, or both, under contract with, and on
behalf of, the participating local governmental agency, the
department shall be held harmless by that particular local
governmental agency for 100 percent of the amount of any such federal
audit disallowance and interest, less the amounts already remitted
to the state pursuant to subdivision (m) for the disallowed claim.
   (k) The use of local matching funds required by this section shall
not create, lead to, or expand the health care funding obligations
or service obligations for current or future years for each local
governmental agency, except as required by this section or as may be
required by federal law.
   (l) TCM services are services which assist beneficiaries to gain
access to needed medical, social, educational, and other services.
Services provided by TCM providers, and their subcontractors, shall
be defined in regulation, and shall include at least one of the
following:
   (1) Assessment.
   (2) Plan development.
   (3) Linkage and consultation.
   (4) Assistance in accessing services.
   (5) Periodic review.
   (6) Crisis assistance planning.
   (m) (1) Each local government agency shall contribute to the
department a portion of the agency's general fund that has been made
available due to the coverage of services described in this section
under the Medi-Cal program.   For both the 1994-95 and
1995-96 fiscal years, this contribution shall not exceed twenty
million dollars ($20,000,000) in each fiscal year less the amount
contributed pursuant to subdivision (m) of Section 14132.47.
  The contributed funds shall be reinvested in health
services through the Medi-Cal program.  The total contribution amount
shall be equal to 331/3 percent of the amounts that have been made
available under this section  , but in no case shall this
contribution exceed twenty million dollars ($20,000,000) in a fiscal
year less the amount contributed pursuant to subdivision (m) of
Section 14132.47  .  Beginning with the 1994-95 fiscal year,
each local governmental agency's share of the total contribution
shall be determined by claims submitted and approved for payment
through January 1 of the following calendar year.  Claims received
and approved for payment after January 1 for dates of service in the
previous fiscal year shall be included in the following year's
calculation.  Each local governmental agency's share of the
contribution for the previous fiscal year shall be determined no
later than February 15 and shall be remitted to the state no later
than April 1 of each year.  The contribution amount shall be paid
from nonfederal, general fund revenues, and shall be deposited in the
Targeted Case Management Claiming Fund, which is hereby created, for
transfer to the Health Care Deposit Fund.
   (2) Moneys received by the department pursuant to this subdivision
are hereby continuously appropriated, notwithstanding Section 13340
of the Government Code, to the department for the support of the
Medi-Cal program, and the funds shall be administered in accordance
with procedures prescribed by the Department of Finance.  If not paid
as provided in this section, the department may offset payments due
to each local governmental agency from the state, not related to
payments required to be made pursuant to this section, in order to
recoup these funds for the Targeted Case Management Claiming Fund.
   (n) As a condition of participation and in consideration of the
joint effort of the local governmental agencies and the department in
implementing this section and the ongoing need of local governmental
agencies to receive technical support from the department, as well
as assistance in claims processing and program monitoring, the local
governmental agencies shall cover the costs of the administrative
activities performed by the department.  Each local governmental
agency shall annually pay a portion of the total costs of
administrative activities performed by the department through a
mechanism agreed to by the department and the local governmental
agencies, or if no agreement is reached by August 1 of each year,
directly to the state.  The department shall determine and report the
staffing requirements upon which projected costs will be based.
Projected costs shall include the anticipated salaries, benefits, and
operating expenses necessary to administer targeted case management.

   (o) For the purposes of this section a "local governmental agency"
means a county or chartered city.   
  SEC. 44.  Section 14132.47 of the Welfare and Institutions Code is
amended to read: 
   14132.47.  (a) It is the intent of the Legislature to provide
local governmental agencies the choice of participating in either or
both of the Targeted Case Management (TCM) and Administrative
Claiming process programs at their option, subject to the
requirements of this section and Section 14132.44.
   (b) The department may contract with each participating local
governmental agency to assist with the performance of administrative
activities necessary for the proper and efficient administration of
the Medi-Cal program, pursuant to Section 1396b(a) of Title 42 of the
United States Code, Section 1903a of the federal Social Security
Act, and this activity shall be known as the Administrative Claiming
process.
   (c) (1) As a condition for participation in the Administrative
Claiming process, each participating local governmental agency shall,
for the purpose of claiming federal medicaid matching funds, enter
into a contract with the department and shall certify to the
department the amount of local governmental agency general funds or
any other funds allowed under federal law and regulation expended on
the allowable administrative activities.
   (2) The department shall deny the claim if it determines that the
certification is not adequately supported for purposes of federal
financial participation.
   (d) Each participating local governmental agency may subcontract
with nongovernmental entities to assist with the performance of
administrative activities necessary for the proper and efficient
administration of the Medi-Cal program under the conditions specified
by the department in regulations.  A nongovernmental entity may
include a local educational agency.
   (e) Each Administrative Claiming process contract shall include a
requirement that each participating local governmental agency submit
a claiming plan in a manner that shall be prescribed by the
department in regulations, developed in consultation with local
governmental agencies.
   (f) The department shall require that each participating local
governmental agency certify to the department both of the following:

   (1) The availability and expenditure of 100 percent of the
nonfederal share of the cost of performing Administrative Claiming
process activities. The funds expended for this purpose shall be from
the local governmental agency's general fund or from any other funds
allowed under federal law and regulation.
   (2) In each fiscal year that its expenditures represent costs that
are eligible for federal financial participation for that fiscal
year.  The department shall deny the claim if it determines that the
certification is not adequately supported for purposes of federal
financial participation.
   (g) (1) Notwithstanding any other provision of this section, the
state shall be held harmless, in accordance with paragraphs (2) and
(3), from any federal audit disallowance and interest resulting from
payments made to a participating local governmental agency pursuant
to this section, less the amounts already remitted to the state
pursuant to subdivision (m) for the disallowed claim.
   (2) To the extent that a federal audit disallowance and interest
results from a claim or claims for which any participating local
governmental agency has received reimbursement for Administrative
Claiming process activities, the department shall recoup from the
local governmental agency that submitted the disallowed claim,
through offsets or by a direct billing, amounts equal to the amount
of the disallowance and interest, in that fiscal year, less the
amounts already remitted to the state pursuant to subdivision (m) for
the disallowed claim.  All subsequent claims submitted to the
department applicable to any previously disallowed administrative
activity or claim, may be held in abeyance, with no payment made,
until the federal disallowance issue is resolved.
   (3) Notwithstanding paragraph (2), to the extent that a federal
audit disallowance and interest results from a claim or claims for
which the participating local governmental agency has received
reimbursement for Administrative Claiming process activities
performed by a nongovernmental entity under contract with, and on
behalf of, the participating local governmental agency, the
department shall be held harmless by that particular participating
local governmental agency for 100 percent of the amount of any such
federal audit disallowance and interest, less the amounts already
remitted to the state pursuant to subdivision (m) for the disallowed
claim.
   (h) The use of local matching funds required by this section shall
not create, lead to, or expand the health care funding obligations
or service obligations for current or future years for any
participating local governmental agency, except as required by this
section or as may be required by federal law.
   (i) The department shall deny any claim from a participating local
governmental agency if the department determines that the claim is
not adequately supported in accordance with criteria established
pursuant to this subdivision and implementing regulations before it
forwards such a claim for reimbursement to the federal medicaid
program.  In consultation with local government agencies, the
department shall adopt regulations that prescribe the requirements
for the submission and payment of claims for administrative
activities performed by each participating local agency.
   (j) Administrative activities shall be those determined by the
department to be necessary for the proper and efficient
administration of the state's medicaid plan and shall be defined in
regulation.
   (k) If the department denies any claim submitted under this
section, the affected participating local governmental agency may,
within 30 days after receipt of written notice of the denial, request
that the department reconsider its action.  The participating local
governmental agency may request a meeting with the director or his or
her designee within 30 days to present its concerns to the
department after the request is filed.  If the director or his or her
designee cannot meet, the department shall respond in writing
indicating the specific reasons for which the claim is out of
compliance to the participating local governmental agency in response
to its appeal.  Thereafter, the decision of the director shall be
final.
   (l) Participating local governmental agencies may claim the actual
costs of nonemergency, nonmedical transportation of Medi-Cal
eligibles to Medi-Cal covered services, under guidelines established
by the department, to the extent that these costs are actually borne
by the participating local governmental agency.
   (m) (1) Each participating local governmental agency shall
contribute to the department a portion of the agency's general fund
that has been made available due to the coverage of administrative
activities described in this section under the Medi-Cal program.
 For both the 1994-95 and 1995-96 fiscal years, this
contribution shall not exceed twenty million dollars ($20,000,000)
each fiscal year less the amount contributed pursuant to subdivision
(m) of Section 14132.44.   The contributed funds shall be
reinvested in health services through the Medi-Cal program.  The
total contribution amount shall be equal to 331/3 percent of amounts
made available under this section  , but in no case shall the
contribution exceed twenty million dollars ($20,000,000) a fiscal
year less the amount contributed pursuant to subdivision (m) of
Section 14132.44  .  Beginning with the 1994-95 fiscal year,
each local governmental agency's share of the total contribution
shall be determined by claims submitted and approved for payment
through January 1 of the following calendar year.  Claims received
and approved for payment after January 1 for dates of service in the
previous fiscal year shall be included in the following year's
calculation.  Each local governmental agency's share of the
contribution for the previous fiscal year shall be determined no
later than February 15 and shall be remitted to the state no later
than April 1 of each year.  The contribution amount shall be paid
from nonfederal, general fund revenues and shall be deposited in the
Administrative Claiming Fund for transfer to the Health Care Deposit
Fund.
   (2) Moneys received by the department pursuant to this subdivision
are hereby continuously appropriated to the department for support
of the Medi-Cal program, and the funds shall be administered in
accordance with procedures prescribed by the Department of Finance.
If not paid as provided in this section, the department may offset
payments due to each participating local governmental agency from the
state, not related to payments required to be made pursuant to this
section in order to recoup these funds for the Administrative
Claiming Fund.
   (n) As a condition of participation in the Administrative Claiming
process and in recognition of revenue generated to each
participating local governmental agency in the Administrative
Claiming process, each participating local governmental agency shall
pay an annual participation fee through a mechanism agreed to by the
state and local governmental agencies, or, if no agreement is reached
by August 1 of each year, directly to the state.  The participation
fee shall be used to cover the cost of administering the
Administrative Claiming process, including, but not limited to,
claims processing, technical assistance, and monitoring.  The
department shall determine and report staffing requirements upon
which projected costs will be based.  The amount of the participation
fee shall be based upon the anticipated salaries, benefits, and
operating expenses, to administer the Administrative Claiming process
and other costs related to that process.
   (o) For the purposes of this section "participating local
governmental agency" means a county or chartered city under contract
with the department pursuant to subdivision (b).
   (p) For the purposes of this section, a "nongovernmental entity"
does not include an entity or person administered by, affiliated
with, or employed by a participating local governmental agency.
   (q) The requirements of subdivision (m) shall not apply to claims
for administrative activities, pursuant to the Administrative
Claiming process, performed by public health programs administered by
the state.
   (r) A participating local governmental agency may charge an
administrative fee to any entity claiming Administrative Claiming
through that agency.
   (s) The department shall continue to administer the Administrative
Claiming process in conformity with federal requirements.
   (t) The department shall provide technical assistance to all
participating local governmental agencies in order to maximize
federal financial participation in the Administrative Claiming
process.
   (u) This section shall be applicable to Administrative Claiming
process activities performed, and to moneys paid to participating
local governmental agencies for those activities, in the 1994-95
fiscal year and thereafter.   
  SEC. 45.  Section 14132.90 of the Welfare and Institutions Code is
amended to read: 
   14132.90.  (a) As of September 15, 1995, day care habilitative
services, pursuant to subdivision (c) of Section 14021 shall be
provided only to alcohol and drug exposed pregnant women and women in
the postpartum period, or as required by federal law.
   (b) (1) Notwithstanding any other provision of law, except to the
extent required by federal law,  if, as of May 15, 1997, the
projected costs for the 1996-97 fiscal year for  outpatient drug
abuse services, as described in Section 14021,  shall not be
benefits under this chapter as of July 1, 1996, if the projected
costs for those outpatient drug abuse services for the 1995-96 fiscal
year as of May 15, 1996,  exceed  sixty million
dollars ($60,000,000)   forty-five million dollars
($45,000,000)  in state General Fund moneys  , then the
outpatient drug free services, as defined in Section 51341.1 of Title
22 of the California Code of Regulations, shall not be a benefit
under this chapter as of July 1, 1997  .
   (2) Notwithstanding paragraph (1), outpatient methadone
maintenance and Naltrexone shall remain benefits under this chapter.

   (3) Notwithstanding paragraph (1), residential care, outpatient
drug free services, and day care habilitative services, for alcohol
and drug exposed pregnant women and women in the postpartum period
shall remain benefits under this chapter.   
  SEC. 46.  Section 14133.22 of the Welfare and Institutions Code is
amended to read: 
   14133.22.  (a) Prescribed drugs shall be limited to no more than
six per month, unless prior authorization is obtained.
   (b) The limit in subdivision (a) shall not apply to patients
receiving care in a nursing facility.
   (c) The limit in subdivision (a) shall not apply to drugs for
family planning.
   (d) The department may issue Medi-Cal cards that contain labels
for prescribed drugs to implement this section.
   (e) In carrying out this section, the department may contract
either directly, or through the fiscal intermediary, for pharmacy
consultant staff necessary to accomplish the treatment authorization
request reviews.   This authority shall extend for a maximum
of 36 months from the date of the initial contract.   
  SEC. 47.  Section 14148.5 of the Welfare and Institutions Code is
amended to read: 
   14148.5.  (a) State funded perinatal services shall be provided
under the Medi-Cal program to pregnant women and state funded medical
services to infants up to one year of age in families with incomes
above 185 percent, but not more than 200 percent of the federal
poverty level, in the same manner that these services are being
provided to the Medi-Cal population, including eligibility
requirements and integration of eligibility determinations and
payment of claims, except as follows:
   (1) The assets of the family shall not be considered in making the
eligibility determination.
   (2) The income deduction specified in subdivision (f) of Section
14148 shall not be applied.
   (b) Services provided under this section shall not be subject to
any share-of-cost requirements.
   (c) (1) The department, in implementing the Medi-Cal program and
public health programs, in coordination with the Major Risk Medical
Insurance Programs Access for Infants and Mothers component shall
provide for outreach activities in order to enhance participation and
access to perinatal services.  Notwithstanding Section 30122
of the Revenue and Taxation Code, funding for these outreach
activities shall be made available from the funds appropriated for
purposes of this section, and to the extent permissible, from funding
received pursuant to Subchapter XIX (commencing with Section 1396)
of Chapter 7 of Title 42 of the United States Code. 
Funding received pursuant to the federal provisions shall be used to
expand perinatal outreach activities.
   (2) Those outreach activities required by paragraph (1) shall be
targeted toward both Medi-Cal and non-Medi-Cal eligible high risk or
uninsured pregnant women and infants.  Outreach activities may
include, but not be limited to, all of the following:
   (A) Education of the targeted women on the availability and
importance of early prenatal care and referral to Medi-Cal and other
programs.
   (B) Information provided through toll-free telephone numbers.
   (C) Recruitment and retention of perinatal providers.
   (d)  The amendment made to paragraph (1) of subdivision
(c) by Senate Bill 99 of the 1991-92 Regular Session constitutes an
amendment to the Tobacco Tax and Health Protection Act of 1988.
   (e) This section shall remain operative only until July 1, 1996,
and shall remain in effect only until January 1, 1997, and as of that
date is repealed, unless a later enacted statute, which is effective
on or before January 1, 1997, deletes or extends that date.
  Notwithstanding any other provision of law, contracts
required to implement the provisions of this section shall be exempt
from the approval of the Director of General Services and from the
provisions of the Public Contract Code.
   (e) The programs authorized in this section shall be operative for
the entire 1996-97 fiscal year.   
  SEC. 48.  Section 14163 of the Welfare and Institutions Code is
amended to read: 
   14163.  (a) For purposes of this section, the following
definitions shall apply:
   (1) "Public entity" means a county, a city, a city and county, the
University of California, a local hospital district, a local health
authority, or any other political subdivision of the state.
   (2) "Hospital" means a health facility that is licensed pursuant
to Chapter 2 (commencing with Section 1250) of Division 2 of the
Health and Safety Code to provide acute inpatient hospital services,
and includes all components of the facility.
   (3) "Disproportionate share hospital" means a hospital providing
acute inpatient services to Medi-Cal beneficiaries that meets the
criteria for disproportionate share status relating to acute
inpatient services set forth in Section 14105.98.
   (4) "Disproportionate share list" means the annual list of
disproportionate share hospitals for acute inpatient services issued
by the department pursuant to Section 14105.98.
   (5) "Fund" means the Medi-Cal Inpatient Payment Adjustment Fund.
   (6) "Eligible hospital" means, for a particular state fiscal year,
a hospital on the disproportionate share list that is eligible to
receive payment adjustment amounts under Section 14105.98 with
respect to that state fiscal year.
   (7) "Transfer year" means the particular state fiscal year during
which, or with respect to which, public entities are required by this
section to make an intergovernmental transfer of funds to the
Controller.
   (8) "Transferor entity" means a public entity that, with respect
to a particular transfer year, is required by this section to make an
intergovernmental transfer of funds to the Controller.
   (9) "Transfer amount" means an amount of intergovernmental
transfer of funds that this section requires for a particular
transferor entity with respect to a particular transfer year.
   (10) "Intergovernmental transfer" means a transfer of funds from a
public entity to the state, that is local government financial
participation in Medi-Cal pursuant to the terms of this section.
   (11) "Licensee" means an entity that has been issued a license to
operate a hospital by the department.
   (12) "Annualized Medi-Cal inpatient paid days" means the total
number of Medi-Cal acute inpatient hospital days, regardless of dates
of service, for which payment was made by or on behalf of the
department to a hospital, under present or previous ownership, during
the most recent calendar year ending prior to the beginning of a
particular transfer year, including all Medi-Cal acute inpatient
covered days of care for hospitals that are paid on a different basis
than per diem payments.
   (13) "Medi-Cal acute inpatient hospital day" means any acute
inpatient day of service attributable to patients who, for those
days, were eligible for medical assistance under the California state
plan, including any day of service that is reimbursed on a basis
other than per diem payments.
   (b) The Medi-Cal Inpatient Payment Adjustment Fund is hereby
created in the State Treasury.  Notwithstanding Section 13340 of the
Government Code, the fund shall be continuously appropriated to, and
under the administrative control of, the department for the purposes
specified in subdivision (d).  The fund shall consist of the
following:
   (1) Transfer amounts collected by the Controller under this
section, whether submitted by transferor entities pursuant to
subdivision (i) or obtained by offset pursuant to subdivision (j).
   (2) Any other intergovernmental transfers deposited in the fund,
as permitted by Section 14164.
   (3) Any interest that accrues with respect to amounts in the fund.

   (c) Moneys in the fund, which shall not consist of any state
general funds, shall be used as the source for the nonfederal share
of payments to hospitals pursuant to Section 14105.98.  Moneys shall
be allocated from the fund by the department and matched by federal
funds in accordance with customary Medi-Cal accounting procedures,
and used to make payments pursuant to Section 14105.98.
   (d) Except as otherwise provided in Section 14105.98 or in any
provision of law appropriating a specified sum of money to the
department for administering this section and Section 14105.98,
moneys in the fund shall be used only for the following:
   (1) Payments to hospitals pursuant to Section 14105.98.
   (2) Except for the amount transferred pursuant to paragraph (3),
transfers to the Health Care Deposit Fund  in  
as follows:
   (A) In  the amount of two hundred thirty-nine million seven
hundred fifty-seven thousand six hundred ninety dollars
($239,757,690), for the 1994-95  fiscal year and for each
fiscal year thereafter   and 1995-96 fiscal years 
.  
   (B) In the amount of two hundred twenty-nine million seven hundred
fifty-seven thousand six hundred ninety dollars
                         ($229,757,690) for the 1996-97 fiscal year
and each fiscal year thereafter.
   (C)   Notwithstanding any other provision of law, the amount
specified in this paragraph shall be in addition to any amounts
transferred to the Health Care Deposit Fund arising from changes of
any kind attributable to payment adjustment years prior to the
1993-94 payment adjustment year.  These transfers from the fund shall
be made in six equal monthly installments to the Medi-Cal local
assistance appropriation item (Item 4260-101-001 of the annual Budget
Act) in support of Medi-Cal expenditures.  The first installment
shall accrue in October of each transfer year, and all other
installments shall accrue monthly thereafter from November through
March.
   (3) In the 1993-94 fiscal year, in addition to the amount
transferred as specified in paragraph (2), fifteen million dollars
($15,000,000) shall also be transferred to the Medi-Cal local
assistance appropriation item (Item 4260-101-001) of the Budget Act
of 1993.
   (e) For the 1991-92 state fiscal year, the department shall
determine, no later than 70 days after the enactment of this section,
the transferor entities for the 1991-92 transfer year.  To make this
determination, the department shall utilize the disproportionate
share list for the 1991-92 fiscal year, which shall be issued by the
department no later than 65 days after the enactment of this section,
pursuant to paragraph (1) of subdivision (f) of Section 14105.98.
The department shall identify each eligible hospital on the list for
which a public entity is the licensee as of July 1, 1991.  The public
entity that is the licensee of each identified eligible hospital
shall be a transferor entity for the 1991-92 transfer year.
   (f) The department shall determine, no later than 70 days after
the enactment of this section, the transfer amounts for the 1991-92
transfer year.
   The transfer amounts shall be determined as follows:
   (1) The eligible hospitals for 1991-92 shall be identified.  For
each hospital, the applicable total per diem payment adjustment
amount under Section 14105.98 for the 1991-92 transfer year shall be
computed.  This amount shall be multiplied by 80 percent of the
eligible hospital's annualized Medi-Cal inpatient paid days as
determined from all Medi-Cal paid claims records available through
April 1, 1991.  The products of these calculations for all eligible
hospitals shall be added together to determine an aggregate sum for
the 1991-92 transfer year.
   (2) The eligible hospitals for 1991-92 involving transferor
entities as licensees shall be identified.  For each hospital, the
applicable total per diem payment adjustment amount under Section
14105.98 for the 1991-92 transfer year shall be computed.  This
amount shall be multiplied by 80 percent of the eligible hospital's
annualized Medi-Cal inpatient paid days as determined from all
Medi-Cal paid claims records available through April 1, 1991.  The
products of these calculations for all eligible hospitals with
transferor entities as licensees shall be added together to determine
an aggregate sum for the 1991-92 transfer year.
   (3) The aggregate sum determined under paragraph (1) shall be
divided by the aggregate sum determined under paragraph (2), yielding
a factor to be utilized in paragraph (4).
   (4) The factor determined in paragraph (3) shall be multiplied by
the amount determined for each hospital under paragraph (2).  The
product of this calculation for each hospital in paragraph (2) shall
be divided by 1.771, yielding a transfer amount for the particular
transferor entity for the transfer year, except as provided by
paragraph (5).
   (5) Only for the transfer year with respect to which the payment
adjustment program set forth in Section 14105.98 first gains federal
approval, a reduction in the transfer amount determined pursuant to
paragraph (4) shall be applicable under the following circumstances:

   (A) To determine any such reduction, the transfer amount
determined pursuant to paragraph (4) shall first be multiplied by a
fraction, the numerator of which is the number of days of the
transfer year for which federal approval is effective and the
denominator of which is 365.
   (B) If the product of the calculation under subparagraph (A) is 80
percent or more of the transfer amount determined under paragraph
(4), no reduction of the transfer amount determined under paragraph
(4) shall apply.
   (C) If the product of the calculation under subparagraph (A) is
less than 80 percent of the transfer amount determined under
paragraph (4), a reduction shall apply to the transfer amount
determined under paragraph (4).  The reduction shall be that
particular amount which is equal to the difference between (i) the
transfer amount determined under paragraph (4) and (ii) the amount
calculated under subparagraph (A) divided by 80 percent.
   (D) Any reduction of a transfer amount applicable under
subparagraph (C) shall be spread equally among the installments
referred to in subdivision (i).
   (g) For the 1991-92 transfer year, the department shall notify
each transferor entity in writing of its applicable transfer amount
or amounts no later than 70 days after the enactment of this section,
which amount or amounts shall be subject to adjustment pursuant to
subdivisions (f) and (i).
   (h) For the 1992-93 transfer year and subsequent transfer years,
transfer amounts shall be determined in the same procedural manner as
set forth in subdivision (f), except:
   (1) The department shall use all of the following:
   (A) The disproportionate share list applicable to the particular
transfer year to determine the eligible hospitals.
   (B) The payment adjustment amounts calculated under Section
14105.98 for the particular transfer year.  These amounts shall take
into account any projected or actual increases or decreases in the
size of the payment adjustment program as are required under Section
14105.98 for the particular year in question.  Subject to the
installment schedule in paragraph (5) of subdivision (i) regarding
transfer amounts, the department may issue interim, revised, and
supplemental transfer requests as necessary and appropriate to
address changes in payment adjustment levels that occur under Section
14105.98.  All transfer requests, or adjustments thereto, issued to
transferor entities by the department shall meet the requirements set
forth in subparagraph (E) of paragraph (5) of subdivision (i).
   (C) Data regarding annualized Medi-Cal inpatient paid days for the
most recent calendar year ending prior to the beginning of the
particular transfer year, as determined from all Medi-Cal paid claims
records available through April 1 preceding the particular transfer
year.
   (D) The status of public entities as licensees of eligible
hospitals as of July 1 of the particular transfer year.
   (E) The transfer amounts calculated by the department may be
increased or decreased by a percentage amount consistent with the
Medi-Cal State Plan.
   (2) For the 1993-94 transfer year and subsequent transfer years,
transfer amounts shall be increased on a pro rata basis for each
transferor entity for the particular transfer year in the amounts
necessary to fund the nonfederal share of the total supplemental
lump-sum payment adjustment amounts that arise under Section
14105.98.  For purposes of this paragraph, the supplemental lump-sum
payment adjustment amounts shall be deemed to arise for the
particular transfer year as of the date specified in Section
14105.98.  Transfer amounts to fund the nonfederal share of the
payments shall be paid by the transferor entities for the particular
transfer year within 20 days after the department notifies the
transferor entity in writing of the additional transfer amount to be
paid.
   (3) The department shall prepare preliminary analyses and
calculations regarding potential transfer amounts, and potential
transferor entities shall be notified by the department of estimated
transfer amounts as soon as reasonably feasible regarding any
particular transfer year.  Written notices of transfer amounts shall
be issued by the department as soon as possible with respect to each
transfer year.  All state agencies shall take all necessary steps in
order to supply applicable data to the department to accomplish these
tasks.  The Office of Statewide Health Planning and Development
shall provide to the department quarterly access to the edited and
unedited confidential patient discharge data files for all Medi-Cal
eligible patients.  The department shall maintain the confidentiality
of that data to the same extent as is required of the Office of
Statewide Health Planning and Development.  In addition, the Office
of Statewide Health Planning and Development shall provide to the
department, not later than March 1 of each year, the data specified
by the department, as the data existed on the statewide data base
file as of February 1 of each year, from all of the following:
   (A) Hospital annual disclosure reports, filed with the Office of
Statewide Health Planning and Development pursuant to Section 443.31
of the Health and Safety Code, for hospital fiscal years that ended
during the calendar year ending 13 months prior to the applicable
February 1.
   (B) Annual reports of hospitals, filed with the Office of
Statewide Health Planning and Development pursuant to Section 439.2
of the Health and Safety Code, for the calendar year ending 13 months
prior to the applicable February 1.
   (C) Hospital patient discharge data reports, filed with the Office
of Statewide Health Planning and Development pursuant to subdivision
(g) of Section 443.31 of the Health and Safety Code, for the
calendar year ending 13 months prior to the applicable February 1.
   (D) Any other materials on file with the Office of Statewide
Health Planning and Development.
   (4) For the 1993-94 transfer year and subsequent transfer years,
the divisor to be used for purposes of the calculation referred to in
paragraph (4) of subdivision (f) shall be determined by the
department.  The divisor shall be calculated to ensure that the
appropriate amount of transfers from transferor entities are received
into the fund to satisfy the requirements of Section 14105.98 for
the particular transfer year.  For the 1993-94 transfer year, the
divisor shall be 1.742.
   (5) For the 1993-94 fiscal year, the transfer amount that would
otherwise be required from the University of California shall be
increased by fifteen million dollars ($15,000,000).
   (6) Notwithstanding any other provision of law, the total amount
of transfers required from the transferor entities for any particular
transfer year shall not exceed the sum of the following:
   (A) The amount needed to fund the nonfederal share of all payment
adjustment amounts applicable to the particular payment adjustment
year as calculated under Section 14105.98.  Included in the
calculations for this purpose shall be any decreases in the program
as a whole, and for individual hospitals, that arise due to the
provisions of Section 1396r-4(f) of Title 42 of the United States
Code.
   (B) The amount needed to fund the transfers to the Health Care
Deposit Fund, as referred to in paragraphs (2) and (3) of subdivision
(d).
   (7) (A) Except as provided in subparagraph (B) and in subparagraph
(A) of paragraph (2) of subdivision (j), and except for a prudent
reserve not to exceed two million dollars ($2,000,000) in the
Medi-Cal Inpatient Payment Adjustment Fund, any amounts in the fund,
including interest that accrues with respect to the amounts in the
fund, that are not expended, or estimated to be required for
expenditure, under Section 14105.98 with respect to a particular
transfer year shall be returned on a pro rata basis to the transferor
entities for the particular transfer year within 120 days after the
department determines that the funds are not needed for an
expenditure in connection with the particular transfer year.
   (B) The department shall determine the interest amounts that have
accrued in the fund from its inception through June 30, 1995, and, no
later than January 1, 1996, shall distribute these interest amounts
to transferor entities, as follows:
   (i) The total amount transferred to the fund by each transferor
entity for all transfer years from the inception of the fund through
June 30, 1995, shall be determined.
   (ii) The total amounts determined for all transferor entities
under clause (i) shall be added together, yielding an aggregate of
the total amounts transferred to the fund for all transfer years from
the inception of the fund through June 30, 1995.
   (iii) The total amount determined under clause (i) for each
transferor entity shall be divided by the aggregate amount determined
under clause (ii), yielding a percentage for each transferor entity.

   (iv) The total amount of interest earned by the fund from its
inception through June 30, 1995, shall be determined.
   (v) The percentage determined under clause (iii) for each
transferor entity shall be multiplied by the amount determined under
clause (iv), yielding the amount of interest that shall be
distributed under this subparagraph to each transferor entity.
   (C) Regarding any funds returned to a transferor entity under
subparagraph (A), or interest amounts distributed to a transferor
entity under subparagraph (B), the department shall provide to the
transferor entity a written statement that explains the basis for the
particular return or distribution of funds and contains the general
calculations used by the department in determining the amount of the
particular return or distribution of funds.
   (i) (1) For the 1991-92 transfer year, each transferor entity
shall pay its transfer amount or amounts to the Controller, for
deposit in the fund, in eight equal installments.  Except as provided
below, the first installment shall accrue on July 25, 1991, and all
other installments shall accrue on the 5th day of each month
thereafter from August through February.
   (2) Notwithstanding paragraph (1), no installment shall be payable
to the Controller until that date which is 20 days after the
department notifies the transferor entity in writing that the payment
adjustment program set forth in Section 14105.98 has first gained
federal approval as part of the Medi-Cal program.  For purposes of
this paragraph, federal approval requires both (i) approval by
appropriate federal agencies of an amendment to the Medi-Cal State
Plan, as referred to in subdivision (o) of Section 14105.98, and (ii)
confirmation by appropriate federal agencies regarding the
availability of federal financial participation for the payment
adjustment program set forth in Section 14105.98 at a level of at
least 40 percent of the percentage of federal financial participation
that is normally applicable for Medi-Cal expenditures for acute
inpatient hospital services.
   (3) If any installment that would otherwise be payable under
paragraph (1) is not paid because of the provisions of paragraph (2),
then subparagraphs (A) and (B) shall be followed when federal
approval is gained.
   (A) All installments that were deferred based on the provisions of
paragraph (2) shall be paid no later than 20 days after the
department notifies the transferor entity in writing that federal
approval has been gained, in an amount consistent with subparagraph
(B).
   (B) The installments paid pursuant to subparagraph (A) shall be
paid in full, subject to an adjustment in amount pursuant to
paragraph (5) of subdivision (f).
   (4) All installments for the 1991-92 transfer year that arise in
months after federal approval is gained shall be paid by the 5th day
of the month or 20 days after the department notifies the transferor
entity in writing that federal approval has been gained, whichever is
later.  These installments shall be subject to an adjustment in
amount pursuant to paragraph (5) of subdivision (f).
   (5) (A) Except as provided in subparagraphs (B) and (C), for the
1992-93 transfer year and subsequent transfer years, each transferor
entity shall pay its transfer amount or amounts to the Controller,
for deposit in the fund, in eight equal installments.  The first
installment shall be payable on July 10 of each transfer year.  All
other installments shall be payable on the 5th day of each month
thereafter from August through February.
   (B) For the 1994-95 transfer year, each transferor entity shall
pay its transfer amount or amounts to the Controller, for deposit in
the fund, in five equal installments.  The first installment shall be
payable on October 5, 1994.  The next four installments shall be
payable on the fifth day of each month thereafter from November
through February.
   (C) For the 1995-96 transfer year, each transferor entity shall
pay its transfer amount or amounts to the Controller, for deposit in
the fund, in five equal installments.  The first installment shall be
payable on October 5, 1995.  The next four installments shall be
payable on the fifth day of each month thereafter from November
through February.
   (D) Except as otherwise specifically provided, subparagraphs (A)
to (C), inclusive, shall not apply to increases in transfer amounts
described in paragraph (2) of subdivision (h) or to additional
transfer amounts described in subdivision (o).
   (E) All requests for transfer payments, or adjustments thereto,
issued by the department shall be in writing and shall include (i) an
explanation of the basis for the particular transfer request or
transfer activity, (ii) a summary description of program funding
status for the particular transfer year, and (iii) the general
calculations used by the department in connection with the particular
transfer request or transfer activity.
   (6) A transferor entity may use any of the following funds for
purposes of meeting its transfer obligations under this section:
   (A) General funds of the transferor entity.
   (B) Any other funds permitted by law to be used for these
purposes, except that a transferor entity shall not submit to the
Controller any federal funds unless those federal funds are
authorized by federal law to be used to match other federal funds.
In addition, no private donated funds from any health care provider,
or from any person or organization affiliated with such a health care
provider, shall be channeled through a transferor entity or any
other public entity to the fund.  The transferor entity shall be
responsible for determining that funds transferred meet the
requirements of this subparagraph.
   (j) (1) If a transferor entity does not submit any transfer amount
within the time period specified in this section, the Controller
shall offset immediately the amount owed against any funds which
otherwise would be payable by the state to the transferor entity.
The Controller, however, shall not impose an offset against any
particular funds payable to the transferor entity where the offset
would violate state or federal law.
   (2) Where a withhold or a recoupment occurs pursuant to the
provisions of paragraph (2) of subdivision (r) of Section 14105.98,
the nonfederal portion of the amount in question shall remain in the
fund, or shall be redeposited in the fund by the department, as
applicable.  The department shall then proceed as follows:
   (A) If the withhold or recoupment was imposed with respect to a
hospital whose licensee was a transferor entity for the particular
state fiscal year to which the withhold or recoupment related, the
nonfederal portion of the amount withheld or recouped shall serve as
a credit for the particular transferor entity against an equal amount
of transfer obligations under this section, to be applied whenever
the transfer obligations next arise.  Should no such transfer
obligation arise within 180 days, the department shall return the
funds in question to the particular transferor entity within 30 days
thereafter.
   (B) For other situations, the withheld or recouped nonfederal
portion shall be subject to paragraph (7) of subdivision (h).
   (k) All amounts received by the Controller pursuant to subdivision
(i), paragraph (2) of subdivision (h), or subdivision (o), or offset
by the Controller pursuant to subdivision (j), shall immediately be
deposited in the fund.
   (l) For purposes of this section, the disproportionate share list
utilized by the department for a particular transfer year shall be
identical to the disproportionate share list utilized by the
department for the same state fiscal year for purposes of Section
14105.98.  Nothing on a disproportionate share list, once issued by
the department, shall be modified for any reason other than
mathematical or typographical errors or omissions on the part of the
department or the Office of Statewide Health Planning and Development
in preparation of the list.
   (m) Neither the intergovernmental transfers required by this
section, nor any elective transfer made pursuant to Section 14164,
shall create, lead to, or expand the health care funding or service
obligations for current or future years for any transferor entity,
except as required of the state by this section or as may be required
by federal law, in which case the state shall be held harmless by
the transferor entities on a pro rata basis.
   (n) No amount submitted to the Controller pursuant to subdivision
(i), paragraph (2) of subdivision (h), or subdivision (o), or offset
by the Controller pursuant to subdivision (j), shall be claimed or
recognized as an allowable element of cost in Medi-Cal cost reports
submitted to the department.
   (o) Whenever additional transfer amounts are required to fund the
nonfederal share of payment adjustment amounts under Section 14105.98
that are distributed after the close of the particular payment
adjustment year to which the payment adjustment amounts apply, the
additional transfer amounts shall be paid by the parties who were the
transferor entities for the particular transfer year that was
concurrent with the particular payment adjustment year.  The
additional transfer amounts shall be calculated under the formula
that was in effect during the particular transfer year.  For transfer
years prior to the 1993-94 transfer year, the percentage of the
additional transfer amounts available for transfer to the Health Care
Deposit Fund under subdivision (d) shall be the percentage that was
in effect during the particular transfer year.  These additional
transfer amounts shall be paid by transferor entities within 20 days
after the department notifies the transferor entity in writing of the
additional transfer amount to be paid.
   (p) (1) Ten million dollars ($10,000,000) of the amount
transferred from the Medi-Cal Inpatient Payment Adjustment Fund to
the Health Care Deposit Fund due to amounts transferred attributable
to years prior to the 1993-94 fiscal year is hereby appropriated
without regard to fiscal years to the State Department of Health
Services to be used to support the development of managed care
programs under the department's plan to expand Medi-Cal managed care.

   (2) These funds shall be used by the department for both of the
following purposes:  (A) distributions to counties or other local
entities that contract with the department to receive those funds to
offset a portion of the costs of forming the local initiative entity,
and (B) distributions to local initiative entities that contract
with the department to receive those funds to offset a portion of the
costs of developing the local initiative health delivery system in
accordance with the department's plan to expand Medi-Cal managed
care.
   (3) Entities contracting with the department for any portion of
the ten million dollars ($10,000,000) shall meet the objectives of
the department's plan to expand Medi-Cal managed care with regard to
traditional and safety net providers.
   (4) Entities contracting with the department for any portion of
the ten million dollars ($10,000,000) may be authorized under those
contracts to utilize their funds to provide for reimbursement of the
costs of local organizations and entities incurred in participating
in the development and operation of a local initiative.
   (5) To the full extent permitted by state and federal law, these
funds shall be distributed by the department for expenditure at the
local level in a manner that qualifies for federal financial
participation under the medicaid program.   
  SEC. 49.  Section 14511 is added to the Welfare and Institutions
Code, to read:
   14511.  Notwithstanding any other provision of law, on and after
the effective date of any repeal of Division 24 (commencing with
Section 24000) of the Welfare and Institutions Code, the general
statewide program for the provision of comprehensive clinical family
planning services as referenced in this chapter shall be deemed to be
operative in all respects, and the State Department of Health
Services shall administer the program accordingly.  It is the intent
of the Legislature that appropriate funding be made available at that
time for the general statewide program for the provision of
comprehensive clinical family planning services as set forth in this
chapter through the annual budget process.
  SEC. 50.  Section 14512 is added to the Welfare and Institutions
Code, to read:
   14512.  It is the intent of the Legislature that all contracts for
the provision of direct services entered into by the Office of
Family Planning under this chapter shall be competitively awarded.
  SEC. 51.  Chapter 14 (commencing with Section 18993) is added to
Part 6 of Division 9 of the Welfare and Institutions Code, to read:

      CHAPTER 14.  COMMUNITY CHALLENGE GRANT PROGRAM

   18993.  There is hereby created the Community Challenge Grant
Program in the State Department of Health Services to provide
community challenge grants to reduce the number of teenage and unwed
pregnancies.
   18993.1.  The Legislature hereby finds and declares all of the
following:
   (a) One in three children in California is born out-of-wedlock.
   (b) As many as 70,000 children were born to teenagers in each of
at least the last two years and nearly 25 percent of these were born
to teenage mothers who have previously had children.
   (c) Children who grow up without fathers are five times more
likely to be poor, twice as likely to drop out of school, and much
more likely to end up in foster care
               or juvenile justice facilities.
   (d) Girls raised in single-parent families are three times more
likely to become unwed teenage mothers than those girls raised in
two-parent families.
   (e) Boys without a father in the home are more likely to become
incarcerated, unemployed, or uninvolved with their own children when
they become fathers.
   (f) The consequences of teenage pregnancy and fatherlessness are
significant and far-reaching.
   (g) Teenage and unwed pregnancy are problems that affect community
health and success.
   (h) Government can best solve the problems of teenage and unwed
pregnancies in partnership with local communities, parents, and
families.
   (i) Communities should decide what prevention strategies will work
and be acceptable.
   (j) Parents and families should be included in the teenage
pregnancy prevention strategies.
   18993.2.  (a) The State Department of Health Services shall
administer grants for purposes of this chapter that shall be awarded
pursuant to a request for application process.
   (b) Grants shall be awarded to existing and new community-based
nonprofit organizations and county and local governments for purposes
of implementing locally developed prevention and intervention
strategies designed to do the following:
   (1) Reduce the number of teenage and unwed pregnancies.
   (2) Reduce the number of children growing up in homes without
fathers as a result of these pregnancies.
   (3) Promote responsible parenting and the involvement of the
father in the economic, social, and emotional support of his
children.
   (c) Grant funding shall not be used for clinical services and
shall target, but not be limited to, the following populations:
   (1) Presexual adolescents.
   (2) Sexually active adolescents.
   (3) Pregnant and parenting adolescents.
   (4) Parents and families.
   (5) Adults at risk for unwed motherhood or absentee fatherhood.
   (d) The department shall provide outreach and training to
potential grantees to increase the number of agencies and groups that
may be able to successfully compete for the grants.
   (e) The department shall issue periodic reports that describe the
projects that have been awarded grants pursuant to this chapter.
   18993.3.  (a) An advisory committee of 10 members shall be
appointed to advise and consult with the department regarding the
Community Challenge Grant Program in the following areas:
   (1) The broad goals of the program.
   (2) Effective strategies for implementing the program.
   (3) Elements of evaluating the effectiveness of the program
grantees.
   (4) Strategies for engaging nongovernmental resources and
expertise in the implementation and success of the program.
   (b) Six members shall be appointed by the Secretary of the Health
and Welfare Agency, two members by the Speaker of the Assembly, and
two members by the Senate Committee on Rules.
   (c) The advisory committee shall reflect a broad constituency and
multidisciplinary approach to the problem of teenage and unwed
pregnancy, including persons that represent corporations and
foundations, the religious community, parents, teenagers, the
education and academic community, community-based organizations, and
public health organizations.
   18993.4.  Grant applications shall include, but not be limited to,
the following:
   (a) Plans for community collaboration with parents, local
agencies, businesses, school leaders, community groups, and private
organizations.
   (b) Measurable objectives selected by the applicant.
   (c) Evidence of the applicant's capability to effect proposed
changes.
   (d) A needs assessment.
   (e) A comprehensive description of the population or populations
proposed to be served.
   (f) A project description, a work plan, and budget justifications.

   (g) A project evaluation and a process for data collection to
facilitate the department's ability to conduct a statewide
evaluation.
   18993.5.  (a) Criteria for grant selection shall include, but not
be limited to, the following:
   (1) Degree of community input and collaboration in the project.
   (2) Degree of involvement of parents and families within the
community.
   (3) Degree of involvement of nongovernmental organizations.
   (4) Degree of need for the project in the local community.
   (5) Geographic, economic, population, and ethnic diversity.
   (6) Feasibility.
   (7) Cost effectiveness.
   (8) Degree to which project outcomes can be measured and
evaluated.
   (b) The department shall provide an explanation for the reasons
why an applicant is not funded.
   18993.6.  (a) Grantees shall be required to match a portion of the
grant awarded under the Community Challenge Grant Program with
either dollar or measurable in-kind contributions as provided by this
section.
   (b) Grantees shall provide a match of not less than 10 percent for
the first year of the grant, not less than 15 percent for the second
year of the grant, and not less than 20 percent for the third year
of the grant.
   (c) The match required by this section shall be supplemental to
the funds appropriated for the Community Challenge Grant Program and
shall be from nongovernmental sources.
   18993.7.  (a) The costs for state administration of the Community
Challenge Grant Program may be up to 5 percent of the total
appropriation for the program.  The Legislature shall be notified of
the administrative costs of this program pursuant to Section 28 of
the Budget Act of 1996.  Indirect costs for grantees shall not exceed
10 percent of the grant amount.
   (b) The department may use local assistance funds allocated for
the program to provide training to potential grantees authorized by
subdivision (d) of Section 18993.2.
   (c) The department may use local assistance funds allocated to the
program for the evaluation of the program required by subdivision
(b) of Section 18993.8.
   18993.8.  The department shall conduct a statewide independent
evaluation of the program.  The department shall submit its findings
from the evaluation to the Legislature on or before January 1, 1999.

   18993.9.  This chapter shall remain operative until July 1, 1999,
and shall remain in effect only until January 1, 2000, and as of that
date is repealed, unless a later enacted statute, which is effective
on or before January 1, 2000, deletes or extends that date.
  SEC. 52.  Division 24 (commencing with Section 24000) is added to
the Welfare and Institutions Code, to read:

      DIVISION 24.  STATE-ONLY FAMILY PLANNING PROGRAM

   24000.  There is established in the State Department of Health
Services the State-Only Family Planning Program to provide
comprehensive clinical family planning services to low-income men and
women.  This division shall be known and may be cited as the
State-Only Family Planning Program.
   24001.  (a) For purposes of this division, "family planning" means
the process of establishing objectives for the number and spacing of
children, and selecting the means by which those objectives may be
achieved.  These means include a broad range of acceptable and
effective methods and services to limit or enhance fertility,
including contraceptive methods, natural family planning, abstinence
methods and basic, limited fertility management. Family planning
services include, but are not limited to, preconceptual counseling,
maternal and fetal health counseling, general reproductive health
care, including diagnosis and treatment of infections and conditions,
including cancer, that threaten reproductive capability, medical
family planning treatment and procedures, including supplies and
followup, and informational, counseling, and educational services.
Family planning does not include abortion, pregnancy testing solely
for the purposes of referral for abortion or services ancillary to
abortions, or pregnancy care that is not incident to the diagnosis of
pregnancy.
   (b) For purposes of this division, "department" means the State
Department of Health Services.
   24003.  (a) A person shall be eligible to receive services
pursuant to this chapter provided that the following conditions are
met:
   (1) The person is a resident of California.
   (2) The person has a family income at or below 200 percent of the
federal poverty level.
   (3) The person has no other source of health care coverage unless
the use of that health care coverage would create a barrier to access
because of confidentiality.
   (4) The person is not otherwise eligible for existing Medi-Cal
services without a share of cost.
   (b) Notwithstanding any other provision of law, the provision of
family planning services shall not require the consent of anyone
other than the person who is to receive the services.
   (c) Eligibility shall be determined at point of service by the
provider. The provider shall obtain information on the individual's
family size, income, and health care coverage and then, based on that
information, determine if the individual meets the eligibility
criteria specified in subdivision (a).  All individuals who meet the
eligibility requirements shall be certified by the provider as
eligible for services under the program.  A Medi-Cal share of cost
shall not be used to deny access to family planning services under
the program.  The department may require the collection on a
voluntary basis or the use of the individual's social security
number, or both.  No services shall be denied to a client if a social
security number is not provided.
   (d) Eligibility shall be based on the individual's
self-declaration of gross annual or monthly income, family size, and
other source of health care coverage, signed under penalty of perjury
at each annual eligibility certification.  No asset information
shall be used to determine eligibility.
   (e) The department may establish a copayment system for services
provided pursuant to this chapter that is based upon the income level
of the individual and the cost of the service provided.  No
individual whose documented family income is at or below 100 percent
of the federal poverty level shall be subject to copayment.  The
copayment fee shall not be used to deny access to family planning
services.  State reimbursement to the provider shall be offset by
that amount of the copayment collected from the eligible individual.
The department shall notify providers on an annual basis of the
copayment fee schedule.
   24005.  (a) Only licensed medical personnel with family planning
skills, knowledge, and competency may provide the full range of
family planning medical services covered in this program.
   (b) Medi-Cal enrolled providers, as determined by the department,
shall be eligible to provide family planning services under the
program.  Those providers electing to participate in the program
shall provide the full scope of family planning education,
counseling, and medical services specified for the program, either
directly or by referral, consistent with standards of care issued by
the department.  The department shall require providers to enter into
enrollment agreements with the department to ensure compliance with
standards.  Providers who do not provide services consistent with the
standards of care may be disenrolled as a provider from the program.

   (c) Enrolled providers shall attend specific orientation approved
by the department in comprehensive family planning services.
Enrolled providers who insert IUDs or contraceptive implants shall
have received prior clinical training specific to these procedures.
   24007.  (a) The department shall determine the scope of benefits
for the program, which shall include, but is not limited to, the
following:
   (1) Family planning related services and male and female
sterilization. Family planning services for men and women include
emergency and complication services directly related to the
contraceptive method and followup, consultation and referral
services, as indicated, which may require treatment authorization
requests.
   (2) All United States Department of Health and Human Services,
Federal Drug Administration-approved birth control methods, devices,
and supplies that are in keeping with current standards of practice
and from which the individual may choose.
   (3) Culturally and linguistically appropriate health education and
counseling services, including informed consent; psychosocial and
medical aspects of contraception, sexuality, fertility, pregnancy,
and parenthood; infertility; reproductive health care; preconceptual
and nutrition counseling; prevention and treatment of sexually
transmitted infection; use of contraceptive methods, devices, and
supplies; possible contraceptive consequences and followup;
interpersonal communication and negotiation of relationships to
assist individuals and couples in effective contraceptive method use
and planning families.
   (4) A comprehensive health history, updated at next periodic visit
(between 11 and 24 months after initial examination) that includes a
complete obstetrical history, gynecological history, contraceptive
history, personal medical history, health risk factors, and family
health history, including genetic or hereditary conditions.
   (5) A complete physical examination on initial and subsequent
periodic visits.
   (b) Benefits under this program shall be effective in 30 days
after notice to providers, but not sooner than January 1, 1997.
   24009.  Family planning services are confidential.  All
information about personal facts and circumstances obtained by the
provider shall be treated as privileged communications, shall be held
confidential, and shall not be divulged without the individual's
written consent, except as required by law or as may be necessary to
provide emergency services to the individual or as required by the
department to administer this program.  Information may be disclosed
in summary, statistical, or other form that does not identify
particular individuals.
   24011.  (a) Providers shall submit claims for reimbursement for
services provided on or after January 1, 1997, or receipt of notice
from the department, whichever is later, and covered by this program,
to the fiscal intermediary of the department for payment.  Charges
and individual information shall be submitted on the form or in the
format specified by the department for the state-only family planning
program, and providers shall be reimbursed at the rates established
for those services by the department.
   (b) The department shall use existing contractual claims
processing services in order to promote efficiency and to maximize
use of funds.
   (c) Claims for state-only family planning services provided
through prescription, including laboratory and pharmaceutical, shall
be reimbursed in a manner determined by the department.  Eligible
individuals shall not be charged for any state-only family planning
laboratory or pharmaceutical services.
   (d) Claims for method-related complications requiring approved
treatment authorization requests shall be reimbursed regardless of
category of medical service.
   24013.  (a) Notwithstanding any other provision of law, the
department may adopt any procedures as are necessary for the review
of a grievance or complaint concerning the processing of claims or
payment of moneys alleged by a provider of services to be payable by
reason of any of the provisions of this division.
   (b) Any applicant for, or recipient of, services under the
state-only family planning program shall have a right to a hearing
conducted by the department regarding the person's eligibility or
receipt of services.  A proposed decision from the administrative law
judge shall be submitted to the State Director of Health Services
for adoption, modification, or rehearing. The decision of the
director shall be final.  A person shall not have a right to contest
changes made to the eligibility standards or benefits of the
state-only family planning program.
   24015.  The department may adopt emergency regulations as
necessary to implement and administer this chapter in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code.  The initial adoption of any
emergency regulations following January 1, 1997, shall be deemed to
be an emergency and necessary for immediate preservation of the
public peace, health and safety, or general welfare.  Emergency
regulations adopted pursuant to this act shall remain in effect no
more than 180 days.
   24017.  The program shall be exempt from the requirements of
Chapter 7 (commencing with Section 11700) of Part 1 of Division 3 of
Title 2 of the Government Code and Chapter 3 (commencing with Section
12100) of Division 2 of Part 2 of the Public Contract Code as those
requirements apply to the use of contractual claims processing
services by the department.
   24021.  The department shall conduct an evaluation of the
effectiveness and efficiency of the program, including expanded
access and reduction of unintended pregnancies, and shall report to
the Legislature by no later than January 1, 2000.  The department may
use local assistance funds allocated to the State-Only Family
Planning Program for the evaluation of the program.
   24023.  It is the intent of the Legislature that the State
Department of Health Services shall, effective March 1, 1997, conduct
no other general statewide program for the provision of
comprehensive clinical family planning services as referenced in
Chapter 8.5 (commencing with Section 14500) of Part 3 of Division 9,
while the State-Only Family Planning Program authorized by this
division is in effect.  For the purpose of avoiding a disruption of
services, to the extent the implementation of the State-Only Family
Planning Program does not occur on or before March 1, 1997, the
Director of Health Services may extend the general statewide program
for the provision of comprehensive clinical family planning services
as referenced in Chapter 8.5 (commencing with Section 14500) of Part
3 of Division 9.  This extension shall be made only upon notification
to the Chairperson of the Joint Legislative Budget Committee and the
chairperson of the committee in each house that considers
appropriations and under no condition shall extend beyond 120 days.
   24027.  This division shall remain operative only until July 1,
2000, and, as of January 1, 2001, is repealed, unless a later enacted
statute, which becomes effective on or before January 1, 2001,
deletes or extends that date.
  SEC. 53.  Section 24 of Chapter 305 of the Statutes of 1995 is
amended to read: 
  Sec. 24.  Notwithstanding any other provision of law, the emergency
regulations developed pursuant to Section 14680 of the Welfare and
Institutions Code to implement Part 2.5 (commencing with Section
5775) of Division 5 of the Welfare and Institutions Code shall remain
in effect until July 1,  1996   1997  , or
until the regulations are made permanent, whichever occurs first,
and shall not be subject to the repeal provisions of Section 11346.1
of the Government Code until that time.  
  SEC. 54.  (a) No later than February 15, 1997, the State Department
of Alcohol and Drug Programs shall provide a report to the chairs of
the fiscal committees and policy committees of the Legislature on
each of the audits, studies, and surveys required by this section.
   (b) The State Department of Alcohol and Drug Programs shall
contract for an independent audit of the department's financial
procedures for allocation of funds and reimbursement of costs for
treatment services, including the department's procedures and
timelines for allocation of funds by counties. The department shall
contract with the Bureau of State Audits for this function.
   (c) The State Department of Alcohol and Drug Programs, in
consultation with the State Department of Health Services, shall
contract with an actuarial firm for an independent study of drug and
alcohol treatment rates to determine the actual costs of providing
drug and alcohol treatment and ancillary services in programs funded
through the department.  The study shall include and compare all
costs of treatment services including the use of funds from other
governmental and nongovernmental sources.  The purpose of this study
shall be to provide the department with a factually correct,
statistically valid data base sample to set statewide rates for each
service.
   (d) The State Department of Alcohol and Drug Programs in
consultation with counties and drug and alcohol treatment providers
shall develop a survey to be issued to all counties for distribution
to all providers.  The survey of the alcohol and drug treatment
services funded through the State Department of Alcohol and Drug
Programs shall include at least all of the following:
   (1) A determination of the required length of time to complete the
program, if any.
   (2) The number of clients who entered the program and the number
who completed the program, if applicable.
   (3) How many clients were terminated from the program and the
causes for those terminations.
   (4) The number of times each client was previously in treatment.
   (5) How many and what type of followup services are provided to
clients upon completion of the program.
   (6) What ancillary services are provided during and following
treatment.
   (7) The number of clients receiving each service.
   (8) The description of services provided.
   (9) Each county's procedure timelines for allocation of funds and
reimbursement of costs.
   (10) What services include family members of clients.
   (e) The data from this survey shall be collected and analyzed by
an actuarial firm and validated by the Bureau of State Audits.
  SEC. 55.  The State Department of Health Services shall report to
the Legislature, by March 1, 1997, on the following data with respect
to the child health and disability prevention program provided for
pursuant to Article 6 (commencing with Section 124025) of Chapter 3
of Part 2 of Division 106 of the Health and Safety Code:
   (a) The number of children, by age, enrolled in each health plan
contracting with the state.
   (b) The number of children, by age, who received a comprehensive
examination under the child health and disability prevention program
in each health plan contracting with the state that is capitated for
child health and disability prevention program services.
   (c) It is the intent of the Legislature that the State Department
of Health Services' Division of Medical Care Services and Division of
Primary Care and Family Health cooperate in the development of
shared information capability.  To the extent this capability exists,
the department shall also include in the report required by this
section the number of children, by age, in each health plan
contracting with the state and that is capitated for child health and
disability prevention services, referred for followup diagnosis or
treatment from a child health and disability examination.  To the
extent this capability does not exist, the department shall also
identify in this report the barriers to the development of shared
information and reporting capability, and the cost to develop this
capability.
  SEC. 56.  The State Department of Health Services may adopt
emergency regulations to implement this act in accordance
                                   with the Administrative Procedure
Act, Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code.  The initial adoption
of emergency regulations and one readoption of the initial
regulations shall be deemed to be an emergency and considered by the
Office of Administrative Law as necessary for the immediate
preservation of the public peace, health and safety, or general
welfare.  Initial emergency regulations and the first readoption of
those regulations shall be exempt from review by the Office of
Administrative Law.  The emergency regulations authorized by this
section shall be submitted to the Office of Administrative Law for
filing with the Secretary of State and publication in the California
Code of Regulations and shall remain in effect as emergency
regulations for no more than 180 days.
  SEC. 57.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
   Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.
  SEC. 58.  If any provision of this act or the application thereof
to any person or circumstances is held invalid, that invalidity shall
not affect other provisions or applications of the act which can be
given effect without the invalid provision or application, and to
this end the provisions of this act are severable.
  SEC. 59.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   In order to timely provide for the administration of this act for
the entire 1996-97 fiscal year, it is necessary that this act take
effect immediately.