BILL NUMBER: SB 311	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Alquist

                        FEBRUARY 25, 2009

   An act to amend Section 14459.5 of the Welfare and Institutions
Code, relating to Medi-Cal.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 311, as introduced, Alquist. Medi-Cal: managed care.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which health care services are provided to qualified low-income
persons.
   Existing law, the Waxman-Duffy Prepaid Health Plan Act, allows the
department to contract with prepaid health plans to provide the
benefits authorized under Medi-Cal, providing Medi-Cal beneficiaries
the opportunity to enroll as regular subscribers in prepaid health
plans, as specified.
   Under existing law, the department has responsibility for
monitoring the quality of all Medicaid services provided in the
state.
   This bill would require the department to establish minimum
quality standards, in accordance with a prescribed timeframe, for the
provision of primary, preventive, and acute health care services, as
prescribed. It would permit the department to impose penalties for
violation of the standards, and would require that any savings
derived from these penalties be allocated to plans demonstrating
superior performance, as specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 14459.5 of the Welfare and Institutions Code is
amended to read:
   14459.5.  (a) As delegated by the federal government, the
department has responsibility for monitoring the quality of all
 medicaid   Medicaid services provided in
the state. A key component of this monitoring function is the
performance of annual, independent, external reviews of the quality
of services furnished under each state contract with a health
maintenance organization, as specified by the federal Health Care
Financing Administration.
   (b)    (1)     The department shall
establish minimum quality standards for the provision of primary,
preventive, and acute health care services provided by the health
maintenance organizations under contract with the department. These
standards shall be based on the Healthcare Effectiveness Data and
Information Set (HEDIS) measures for the External Accountability Set
that each plan is required to report annually to the department. The
External Accountability Set shall include a sufficient number of
measures to adequately monitor the managed care plans' provision of
services to its full range of enrollees, including, but not limited
to, children, women, individuals with a disability, and adults with
chronic conditions. The department shall require the External Quality
Review Organization that produces the annual Performance Measures
For Medi-Cal Managed Care Members report to prepare the report in
full compliance with the conventions of the National Committee for
Quality Assurance. 
    (2)     In implementing this subdivision,
it is the intent of the Legislature that the department establish
policies that will result in all Medi-Cal managed care plans
performing at no less than the 50th percentile level of HEDIS by
January 1, 2015, based on the most recent national Medicaid rates for
any   measure reported to the department.  
   (3) The minimum standards established by the department shall
include, but not be limited to, the following:  
   (A) Prior to July 1, 2012, managed care plans shall be required to
perform at no less than the 25th percentile of HEDIS, based on the
most recent national Medicaid rates for all measures reported to the
department.  
   (i) Commencing no later than April 1, 2010, the department shall
annually identify plans that perform below the 25th percentile of
HEDIS, based on the most recent national Medicaid rates for any
measure reported to the department. The department shall require
these managed care plans to develop a corrective action plan that
identifies specific interventions that will improve performance.
 
   (ii) Commencing January 1, 2012, a Medi-Cal managed care plan that
has submitted a corrective action plan and continues to perform
below the 25th percentile of HEDIS, based on the most recent national
Medicaid rates for any measure reported to the department, shall not
be eligible for the assignment of new Medi-Cal enrollees who have
not selected a managed care plan and would otherwise be enrolled in
that plan by the department through the default algorithm.
Additionally, the 10 percent cap that limits the number of defaulted
beneficiaries that a plan can lose from the prior year shall be
lifted for the managed care plans performing below the 25th
percentile of HEDIS.  
   (iii) Commencing July 1, 2014, the department may impose a
financial penalty by withholding up to 5 percent of a Medi-Cal
managed care plan's contract rate, if that plan continues to perform
below the 25th percentile of HEDIS for any measure reported to the
department.  
   (B) Prior to July 1, 2015, managed care plans shall be required to
perform at no less than the 50th percentile of HEDIS, based on the
most recent national Medicaid rates for all measures reported to the
department.  
   (i) Commencing no later than April 1, 2013, the department shall
annually identify managed care plans that perform below the 50th
percentile of HEDIS, based on the most recent national Medicaid rates
for any measure reported to the department. The department shall
require these managed care plans to develop a corrective action plan
that identifies specific interventions that will improve performance.
 
   (ii) Commencing January 1, 2015, a Medi-Cal managed care plan that
has submitted a corrective action plan and continues to perform
below the 50th percentile of HEDIS, based on the most recent national
Medicaid rates for any measure reported to the department, shall not
be eligible for the assignment of new Medi-Cal enrollees who have
not selected a managed care plan and would otherwise be enrolled in
that plan by the department through the default algorithm.
Additionally, the 10 percent cap that limits the number of defaulted
beneficiaries that a plan can lose from the prior year shall be
lifted for the managed care plans performing below the 50th
percentile of HEDIS.  
   (iii) Commencing July 1, 2017, the department may impose a
financial penalty by withholding up to 5 percent of a Medi-Cal
managed care plan's contract rate, if that plan continues to perform
below the 50th percentile of HEDIS for any measure reported to the
department.  
   (4) The department shall allocate any savings derived from
penalties imposed pursuant to paragraph (3) to plans that have
demonstrated superior performance, as indicated by either performance
above the 75th percentile of, or substantial improvement in, HEDIS,
based on the most recent national Medicaid rates for any measure
reported to the department. 
    (c)  The Legislature finds and declares that the final
report obtained from the external reviews will provide valid and
reliable information regarding health care outcomes and the overall
quality of care delivered by the managed care plans. 
   (c) 
    (d)  The department shall make only the final report of
each external review available, within 30 calendar days of
completion, to the fiscal and health policy committees of the
Legislature, and shall make only the final report available for
public viewing upon request by any individual or organization.