BILL ANALYSIS
AB 1966
Page 1
Date of Hearing: April 6, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 1966 (Fletcher) - As Amended: April 5, 2010
SUBJECT : Medi-Cal: federally qualified health center and rural
health center services.
SUMMARY : Allows Federally Qualified Health Centers (FQHCs) and
Rural Health Clinics (RHCs) to be reimbursed for Medi-Cal
hospital inpatient obstetrical and gynecological services
(OB/GYN) at the fee-for-service (FFS) rate. Specifically, this
bill :
1)Authorizes FQHCs and RHCs to elect to have inpatient OB/GYN
services carved out, paid directly to the FQHC or RHC and
reimbursed separately from the per visit blended rate and on a
FFS basis.
2)Requires the Department of Health Care Services (DHCS) to seek
federal approval to implement this by March 30, 2011.
EXISTING LAW :
1)Establishes the Medi-Cal program as California's Medicaid
program, administered by DHCS, which provides comprehensive
health care coverage for low-income individuals and their
families; pregnant women; elderly, blind, or disabled persons;
nursing home residents; and, refugees who meet specified
eligibility criteria.
2)Establishes in state and federal law, the qualifications of
FQHCs and RHCs and requires the Medicare and Medicaid Programs
to reimburse FQHCs at enhanced rates of payment using a
prospective payment system (PPS) per visit rate.
3)Defines, in federal law, FQHC services to include the services
of a physician, physician assistant, nurse practitioner,
certified nurse midwife, clinical psychologist, licensed
clinical social worker, or visiting nurse, as well as any
other ambulatory services offered by an FQHC/RHC which are
otherwise included in the respective state's Medicaid plan.
4)Establishes enrollment requirements for providers to be
AB 1966
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eligible for reimbursement in the Medi-Cal Program.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, the purpose of
this bill is to allow FQHCs and RHCs to bill directly for
inpatient OB/GYN services at a FFS rate and eliminate the need
for a complex contractual arrangement with employed physicians
and nurse midwives. The sponsors, California Primary Care
Association state that this is a technical bill to simplify
the existing process utilized by FQHCs/RHC to secure FFS
reimbursement for inpatient OB/GYN services. According to the
sponsors, without this special carve-out, FQHCs with large
OB/GYN practices would be incapable of sustaining continuity
in care for their prenatal patients during the most critical
moment-labor and delivery at a hospital setting.
2)BACKGROUND . FQHCs/RHCs are federally funded public or
nonprofit community clinics that serve a high number of both
Medi-Cal and uninsured patients. FQHCs/RHCs are open door
providers that treat patients on a sliding fee scale basis and
make available a comprehensive array of health and social
services regardless of the patient's ability to pay.
FQHCs/RHCs were created under a federal grant program
established in the 1960s to improve access to primary and
preventive care for individuals in medically underserved
communities and special populations, such as the medically
uninsured, homeless persons, and migrant farm workers. In
1996, the health center programs (migrant health centers,
community health centers, health care for the homeless, and
health centers for residents of public housing) were
consolidated under Section 330 of the federal Public Health
Service Act (PHS). All PHS grant recipients are nonprofit,
public, or otherwise tax-exempt entities. Clinics receiving
PHS grant funds, and meeting specific federal requirements,
are FQHCs that are entitled to higher reimbursement under
Medicare and Medicaid.
SB 36 (Chesbro), Chapter 527, Statutes of 2003, creates a
statutory structure for the implementation of a PPS for
Medi-Cal reimbursement of FQHCs/RHCs, in response to the
federal Medicare, Medicaid, and State Children's Health
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Insurance Program Benefits Improvement and Protection Act of
2000 which phased out cost-based reimbursement for FQHC/RHCs
and required states to implement a PPS per visit or
federally-approved alternative payment system.
3)PROVIDER ENROLLMENT REQUIREMENTS . In 2003, as part of a
Medi-Cal anti-provider fraud initiative, SB 857 (Speier),
Chapter 601, Statutes of 2003, enacts changes to provider
enrollment in the Medi-Cal Program. These efforts to reduce
provider fraud resulted in more cumbersome enrollment and
reenrollment procedures. The implementation inadvertently
eliminated the ability of FQHCs/RHCs to bill FFS directly for
inpatient services provided by clinicians employed by the
facilities. Specifically, SB 857 required providers to enroll
and bill for services at an established "place of business"
which was defined as the location at which they were covered
by professional liability insurance. Clinicians employed by
FQHCs/RHCs do not carry this insurance as they are covered by
the Federal Tort Claims Act and therefore could not comply
with this requirement. In an effort to resolve this, DHCS, in
December 2005, issued a Medi-Cal Provider Bulletin that
established a process for "clinic-based" providers to enroll
and be eligible to bill for inpatient services. In 2009,
another Medi-Cal Provider Bulletin extended this to nurse
midwives.
4)METHOD OF REIMBURSEMENT . According to the sponsors, the
approach developed by DHCS necessitates reimbursement for
these services to be sent directly to the provider under their
own Medi-Cal provider number rather than the FQHCs/RHCs. Due
to the fact that the FQHC/RHCs employ the provider, this has
compelled the creation of a complex contractual arrangement
where providers sign over the Medi-Cal reimbursement collected
under their provider number to the FQHC/RHC which in turn
protects the provider from being personally taxed on this
revenue. This bill will allow DHCS to establish a Medi-Cal
sub-number, as allowed under the National Provider Identifier
number system and enable the FQHC/RHC to bill directly thereby
eliminating the provider as the middle person.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1966
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California Primary Care Association (sponsor)
Clinicas del Camino Real, Incorporated
Eisner Pediatric & Family Medical Center
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097