Amended in Assembly April 21, 2014

Amended in Assembly March 25, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1759

Introduced by Assembly Members Pan and Skinner

(Coauthor: Assembly Member Bonta)

February 14, 2014

An act to add Sections 14105.196 and 14105.197 to the Welfare and Institutions Code, relating to health care services.

LEGISLATIVE COUNSEL’S DIGEST

AB 1759, as amended, Pan. Medi-Cal: reimbursement rates.

Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which basic health care services are provided to qualified low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid provisions. Existing federal law requires the state to provide payment for primary care services furnished in the 2013 and 2014 calendar years by Medi-Cal providers with specified primary specialty designations at a rate not less than 100% of the payment rate that applies to those services and physicians under the Medicare Program.

Existing state law requires, to the extent required by federal law, and beginning January 1, 2013, through and including December 31, 2014, that payments for primary care services provided by specified physicians be no less than 100% of the payment rate that applies to those services and physicians as established by the Medicare Program, for both fee-for-service and managed care plans.

This bill would require that those payments continue indefinitely to the extent permitted by federal law but only to the extent that federal financial participation is available and would also require that those payments be made to other providers identified in federal law as eligible for the increased reimbursement. The bill would authorize the department to implement these provisions through provider bulletins without taking regulatory action until regulations are adopted and would require the department to adopt those regulations by July 1, 2017. The bill also begin insert would request the University of California to annually conduct an independent assessment of Medi-Cal provider reimbursement rates and end insert would require the department to annually review the findings and recommendations of begin delete an independent assessment of Medi-Cal provider reimbursement rates and to end delete begin insert that assessment and end insert suggest adjustments to the reimbursement rates as necessary to ensure that quality and access in the Medi-Cal fee-for-service program and in Medi-Cal managed care plans are adequate to meet applicable state and federal standards. The bill would require that the findings and recommendations of the independent assessment and the director’s suggested adjustments to provider reimbursement rates be submitted to the Legislature annually as part of the Governor’s Budget. begin insert The bill would also create an advisory committee composed of 16 members appointed by the Governor and the Legislature, as specified, to meet periodically with the University of California and provide input on the assessment conducted pursuant to the bill’s provisions. end insert

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 14105.196 is added to the Welfare and
Institutions Code, to read:

14105.196.  

(a) It is the intent of the Legislature to maintain
the increased reimbursement rates for primary care providers in
the Medi-Cal program upon expiration of the temporary increase
provided for under Chapter 23 of the Statutes of 2012, as amended
by Chapter 438 of the Statutes of 2012, in order to ensure adequate
access to these providers. It is also the intent of the Legislature to
provide a mechanism to increase reimbursement rates for other
Medi-Cal providers in order to comply with federal Medicaid
requirements that care and services are available to Medi-Cal
enrollees at least to the extent that care and services are available
to the general population in the geographic area.

(b) Beginning January 1, 2015, to the extent permitted by federal
law and regulations, payments for primary care services provided
by a physician with a primary specialty designation of family
medicine, general internal medicine, or pediatric medicine shall
not be less than 100 percent of the payment rate that applies to
those services and physicians as established by the Medicare
Program, for both fee-for-service and managed care plans.

(c) (1) To the extent required by federal law or regulation,
beginning January 1, 2015, through and including the date specified
in that federal law or regulation, payments for primary care services
provided by a provider other than a physician shall not be less than
100 percent of the payment rate that applies to those services and
providers as established by the Medicare Program, for both
fee-for-service and managed care plans.

(2) To the extent permitted by federal law and regulation, the
payments to the providers identified in paragraph (1) shall continue
indefinitely.

(d) Notwithstanding any other law, to the extent permitted by
federal law and regulations, the payments for primary care services
made pursuant to this section shall be exempt from the payment
reductions under Sections 14105.191 and 14105.192.

(e) Payment increases made pursuant to this section shall not
apply to provider rates of payment described in Section 14105.18
for services provided to individuals not eligible for Medi-Cal or
the Family Planning, Access, Care, and Treatment (Family PACT)
Program.

(f) For purposes of this section, the following definitions shall
apply:

(1) “Primary care services” and “primary specialty” means the
services and primary specialties defined in Section 1202 of the
federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152; 42 U.S.C. Sec. 1396a(a)(13)(C)), and any
amendments to that section, and related federal regulations.

(2) “A provider other than a physician” means a health care
provider, other than a physician, who is identified in federal law
or regulation as eligible for payments for primary care services
rendered under the federal Medicaid program at a rate not less than
100 percent of the payment rate that applies to those services as
established by the Medicare Program.

(g) Notwithstanding any other law, the payment increase
implemented pursuant to this section shall apply to managed care
health plans that contract with the department pursuant to Chapter
8.75 (commencing with Section 14591) and to contracts with the
Senior Care Action Network and the AIDS Healthcare Foundation,
and to the extent that the services are provided through any of
these contracts, payments shall be increased by the actuarial
equivalent amount of the payment increases pursuant to contract
amendments or change orders effective on or after January 1, 2015.

(h) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department shall implement, clarify, make specific, and define
the provisions of this section by means of provider bulletins or
similar instructions, without taking regulatory action until the time
regulations are adopted. The department shall adopt regulations
by July 1, 2017, in accordance with the requirements of Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of
Title 2 of the Government Code. Beginning July 1, 2015, and
notwithstanding Section 10231.5 of the Government Code, the
department shall provide a status report regarding this section to
the Legislature on a semiannual basis, in compliance with Section
9795 of the Government Code, until regulations have been adopted.

(i) This section shall be implemented only if and to the extent
that federal financial participation is available and any necessary
federal approvals have been obtained.

SEC. 2.  

Section 14105.197 is added to the Welfare and
Institutions Code, to read:

14105.197.  

begin insert

(a) The Legislature requests the University of
California to annually conduct an independent assessment of
Medi-Cal provider reimbursement rates.

end insert begin insert

(b) (1) An advisory committee is hereby created to be composed
of 16 members representing health care stakeholders, including,
but not limited to, patients, providers, public and private health
delivery systems, payers, and state officials. The Governor shall
appoint eight members, the Senate Committee on Rules shall
appoint four members, and the Speaker of the Assembly shall
appoint four members.

end insert begin insert

(2) Except for the initial appointments described in paragraph
(3), members of the committee shall be appointed for a term of
four years, and each member shall hold office until the appointment
and qualification of his or her successor or until one year has
elapsed since the expiration of the term for which he or she was
appointed, whichever occurs first.

end insert begin insert

(3) (A) Of the initial members appointed by the Governor, two
shall serve a term of one year, two shall serve a term of two years,
two shall serve a term of three years, and two shall serve a term
of four years.

end insert begin insert

(B) Of the initial members appointed by the Senate Committee
on Rules, one shall serve a term of one year, one shall serve a term
of two years, one shall serve a term of three years, and one shall
serve a term of four years.

end insert begin insert

(C) Of the initial members appointed by the Speaker of the
Assembly, one shall serve a term of one year, one shall serve a
term of two years, one shall serve a term of three years, and one
shall serve a term of four years.

end insert begin insert

(4) Members of the committee shall publicly report financial
and other potential conflicts of interest.

end insert begin insert

(5) The committee shall establish an open process for the
conduct of its affairs that enables all health care stakeholders to
provide feedback on those affairs.

end insert begin insert

(6) The committee shall meet periodically with the University
of California and provide input to the University of California on
the assessment conducted pursuant to subdivision (a).

end insert

begin insert (c) end insert begin insert   end insert The director shall annually review the findings and
recommendations of begin delete an independent assessment of Medi-Cal
provider reimbursement rates end delete begin insert the assessment conducted under
subdivision (a) end insert and suggest adjustments to the reimbursement rates
as necessary to ensure that quality and access in the Medi-Cal
fee-for-service program and in Medi-Cal managed care plans are
adequate to meet applicable state and federal standards.
begin delete Notwithstanding end delete

begin insert (d) end insert begin insert   end insert begin insert Notwithstanding end insert Section 10231.5 of the Government Code,
the findings and recommendations of the independent assessment
begin insert conducted under subdivision (a) end insert and the director’s suggested
adjustments to provider reimbursement rates begin insert provided pursuant
to subdivision (c) end insert shall be submitted to the Legislature annually
as part of the Governor’s Budget submitted pursuant to Section
13337 of the Government Code.