Senate Bill No. 986

Introduced by Senator Hernandez

February 11, 2014

An act to amend Section 14182 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

SB 986, as introduced, Hernandez. Medi-Cal: managed care: seniors and persons with disabilities.

Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. One of the methods by which these services are provided is pursuant to contracts with various types of managed care health plans. Existing law authorizes the department, in furtherance of a specified waiver or demonstration project, to require seniors and persons with disabilities who do not have other health coverage to be assigned as mandatory enrollees into new or existing managed care health plans. Existing law requires the department, in exercising its authority pursuant to these provisions, to, among other things, ensure that managed care health plans participating in the demonstration project provide access to out-of-network providers for new individual members and comply with continuity of care requirements, as specified.

This bill would instead require the department to ensure that the managed care health plans participating in the demonstration project provide timely access to out-of-network providers for new individual members and fully comply with the continuity of care requirements.

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 14182 of the Welfare and Institutions
Code is amended to read:

14182.  

(a) (1) In furtherance of the waiver or demonstration
project developed pursuant to Section 14180, the department may
require seniors and persons with disabilities who do not have other
health coverage to be assigned as mandatory enrollees into new
or existing managed care health plans. To the extent that enrollment
is required by the department, an enrollee’s access to
fee-for-service Medi-Cal shall not be terminated until the enrollee
has been assigned to a managed care health plan.

(2) For purposes of this section:

(A) “Other health coverage” means health coverage providing
the same full or partial benefits as the Medi-Cal program, health
coverage under another state or federal medical care program, or
health coverage under contractual or legal entitlement, including,
but not limited to, a private group or indemnification insurance
program.

(B) “Managed care health plan” means an individual,
organization, or entity that enters into a contract with the
department pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.81 (commencing with Section 14087.96),
Article 2.91 (commencing with Section 14089), or Chapter 8
(commencing with Section 14200).

(b) In exercising its authority pursuant to subdivision (a), the
department shall do all of the following:

(1) Assess and ensure the readiness of the managed care health
plans to address the unique needs of seniors or persons with
disabilities pursuant to the applicable readiness evaluation criteria
and requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48.

(2) Ensure the managed care health plans provide access to
providers that comply with applicable state and federal laws,
including, but not limited to, physical accessibility and the
provision of health plan information in alternative formats.

(3) Develop and implement an outreach and education program
for seniors and persons with disabilities, not currently enrolled in
Medi-Cal managed care, to inform them of their enrollment options
and rights under the demonstration project. Contingent upon
available private or public dollars other than moneys from the
General Fund, the department or its designated agent for enrollment
and outreach may partner or contract with community-based,
nonprofit consumer or health insurance assistance organizations
with expertise and experience in assisting seniors and persons with
disabilities in understanding their health care coverage options.
Contracts entered into or amended pursuant to this paragraph shall
be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code and any
implementing regulations or policy directives.

(4) At least three months prior to enrollment, inform
beneficiaries who are seniors or persons with disabilities, through
a notice written at no more than a sixth grade reading level, about
the forthcoming changes to their delivery of care, including, at a
minimum, how their system of care will change, when the changes
will occur, and who they can contact for assistance with choosing
a delivery system or with problems they encounter. In developing
this notice, the department shall consult with consumer
representatives and other stakeholders.

(5) Implement an appropriate cultural awareness and sensitivity
training program regarding serving seniors and persons with
disabilities for managed care health plans and plan providers and
staff in the Medi-Cal Managed Care Division of the department.

(6) Establish a process for assigning enrollees into an organized
delivery system for beneficiaries who do not make an affirmative
selection of a managed care health plan. The department shall
develop this process in consultation with stakeholders and in a
manner consistent with the waiver or demonstration project
developed pursuant to Section 14180. The department shall base
plan assignment on an enrollee’s existing or recent utilization of
providers, to the extent possible. If the department is unable to
make an assignment based on the enrollee’s affirmative selection
or utilization history, the department shall base plan assignment
on factors, including, but not limited to, plan quality and the
inclusion of local health care safety net system providers in the
plan’s provider network.

(7) Review and approve the mechanism or algorithm that has
been developed by the managed care health plan, in consultation
with their stakeholders and consumers, to identify, within the
earliest possible timeframe, persons with higher risk and more
complex health care needs pursuant to paragraph (11) of
subdivision (c).

(8) Provide managed care health plans with historical utilization
data for beneficiaries upon enrollment in a managed care health
plan so that the plans participating in the demonstration project
are better able to assist beneficiaries and prioritize assessment and
care planning.

(9) Develop and provide managed care health plans participating
in the demonstration project with a facility site review tool for use
in assessing the physical accessibility of providers, including
specialists and ancillary service providers that provide care to a
high volume of seniors and persons with disabilities, at a clinic or
provider site, to ensure that there are sufficient physically
accessible providers. Every managed care health plan participating
in the demonstration project shall make the results of the facility
site review tool publicly available on their Internet Web site and
shall regularly update the results to the department’s satisfaction.

(10) Develop a process to enforce legal sanctions, including,
but not limited to, financial penalties, withholding of Medi-Cal
payments, enrollment termination, and contract termination, in
order to sanction any managed care health plan in the
demonstration project that consistently or repeatedly fails to meet
performance standards provided in statute or contract.

(11) Ensure that managed care health plans provide a mechanism
for enrollees to request a specialist or clinic as a primary care
provider. A specialist or clinic may serve as a primary care provider
if the specialist or clinic agrees to serve in a primary care provider
role and is qualified to treat the required range of conditions of the
enrollee.

(12) Ensure that managed care health plans participating in the
demonstration project are able to provide communication access
to seniors and persons with disabilities in alternative formats or
through other methods that ensure communication, including
assistive listening systems, sign language interpreters, captioning,
written communication, plain language, or written translations and
oral interpreters, including for those who are limited
English-proficient, or non-English speaking, and that all managed
care health plans are in compliance with applicable cultural and
linguistic requirements.

(13) Ensure that managed care health plans participating in the
demonstration project provide begin insert timely end insert access to out-of-network
providers for new individual members enrolled under this section
who have an ongoing relationship with a provider if the provider
will accept the health plan’s rate for the service offered, or the
applicable Medi-Cal fee-for-service rate, whichever is higher, and
the health plan determines that the provider meets applicable
professional standards and has no disqualifying quality of care
issues.

(14) Ensure that managed care health plans participating in the
demonstration project begin insert fully end insert comply with continuity of care
requirements in Section 1373.96 of the Health and Safety Code.

(15) Ensure that the medical exemption criteria applied in
counties operating under Chapter 4.1 (commencing with Section
53800) or Chapter 4.5 (commencing with Section 53900) of
Subdivision 1 of Division 3 of Title 22 of the California Code of
Regulations are applied to seniors and persons with disabilities
served under this section.

(16) Ensure that managed care health plans participating in the
demonstration project take into account the behavioral health needs
of enrollees and include behavioral health services as part of the
enrollee’s care management plan when appropriate.

(17) Develop performance measures that are required as part
of the contract to provide quality indicators for the Medi-Cal
population enrolled in a managed care health plan and for the
subset of enrollees who are seniors and persons with disabilities.
These performance measures may include measures from the
Healthcare Effectiveness Data and Information Set (HEDIS) or
measures indicative of performance in serving special needs
populations, such as the National Committee for Quality Assurance
(NCQA) Structure and Process measures, or both.

(18) Conduct medical audit reviews of participating managed
care health plans that include elements specifically related to the
care of seniors and persons with disabilities. These medical audits
shall include, but not be limited to, evaluation of the delivery
model’s policies and procedures, performance in utilization
management, continuity of care, availability and accessibility,
member rights, and quality management.

(19) Conduct financial audit reviews to ensure that a financial
statement audit is performed on managed care health plans annually
pursuant to the Generally Accepted Auditing Standards, and
conduct other risk-based audits for the purpose of detecting fraud
and irregular transactions.

(20) Ensure that managed care health plans maintain a dedicated
liaison to coordinate with the department, affected providers, and
new individual members for all of the following purposes:

(A) To ensure a mechanism for new members to obtain
continuity of care as described in paragraph (13).

(B) To receive notice, including that a new member has been
denied a medical exemption as described in paragraph (15), which
is required to include the name or names of the requesting provider,
and ensure that the provider’s ability to treat the member is
continued as described in paragraphs (11) and (13), if applicable,
or, if not applicable, ensure the member is immediately referred
to a qualified provider or specialty care center.

(C) To assist new members in maintaining an ongoing
relationship with a specialist or specialty care center when the
specialist is contracting with the plan and the assigned primary
care provider has approved a standing referral pursuant to Section
1374.16 of the Health and Safety Code.

(21) Ensure that written notice is provided to the beneficiary
and the requesting provider if a request for exemption from plan
enrollment is denied. The notice shall set out with specificity the
reasons for the denial or failure to unconditionally approve the
request for exemption from plan enrollment. The notice shall
inform the beneficiary and the provider of the right to appeal the
decision, how to appeal the decision, and if the decision is not
appealed, that the beneficiary shall enroll in a Medi-Cal plan and
how that enrollment shall occur. The notice shall also include
information of the possibility of continued access to an
out-of-network provider pursuant to paragraph (13). A beneficiary
who has not been enrolled in a plan shall remain in fee-for-service
Medi-Cal if a request for an exemption from plan enrollment or
appeal is submitted, until the final resolution. The department shall
also require the plans to ensure that these beneficiaries receive
continuity of care.

(22) Develop a process to track a beneficiary who has been
denied a request for exemption from plan enrollment and to notify
the plan, if applicable, of the denial, including information
identifying the provider. Notwithstanding paragraph (12) of
subdivision (c), the plan shall immediately refer the beneficiary
for a risk assessment survey and an individual care plan shall be
developed within 10 days, including authorization for 30 days of
continuity of prescription drugs.

(c) Prior to exercising its authority under this section and Section
14180, the department shall ensure that each managed care health
plan participating in the demonstration project is able to do all of
the following:

(1) Comply with the applicable readiness evaluation criteria
and requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48.

(2) Ensure and monitor an appropriate provider network,
including primary care physicians, specialists, professional, allied,
and medical supportive personnel, and an adequate number of
accessible facilities within each service area. Managed care health
plans shall maintain an updated, accurate, and accessible listing
of a provider’s ability to accept new patients and shall make it
available to enrollees, at a minimum, by phone, written material,
and Internet Web site.

(3) Assess the health care needs of beneficiaries who are seniors
or persons with disabilities and coordinate their care across all
settings, including coordination of necessary services within and,
where necessary, outside of the plan’s provider network.

(4) Ensure that the provider network and informational materials
meet the linguistic and other special needs of seniors and persons
with disabilities, including providing information in an
understandable manner in plain language, maintaining toll-free
telephone lines, and offering member or ombudsperson services.

(5) Provide clear, timely, and fair processes for accepting and
acting upon complaints, grievances, and disenrollment requests,
including procedures for appealing decisions regarding coverage
or benefits. Each managed care health plan participating in the
demonstration project shall have a grievance process that complies
with Section 14450, and Sections 1368 and 1368.01 of the Health
and Safety Code.

(6) Solicit stakeholder and member participation in advisory
groups for the planning and development activities related to the
provision of services for seniors and persons with disabilities.

(7) Contract with safety net and traditional providers as defined
in subdivisions (hh) and (jj) of Section 53810, of Title 22 of the
California Code of Regulations, to ensure access to care and
services. The managed care health plan shall establish participation
standards to ensure participation and broad representation of
traditional and safety net providers within a service area.

(8) Inform seniors and persons with disabilities of procedures
for obtaining transportation services to service sites that are offered
by the plan or are available through the Medi-Cal program.

(9) Monitor the quality and appropriateness of care for children
with special health care needs, including children eligible for, or
enrolled in, the California Children’s Services Program, and seniors
and persons with disabilities.

(10) Maintain a dedicated liaison to coordinate with each
regional center operating within the plan’s service area to assist
members with developmental disabilities in understanding and
accessing services and act as a central point of contact for
questions, access and care concerns, and problem resolution.

(11) At the time of enrollment apply the risk stratification
mechanism or algorithm described in paragraph (7) of subdivision
(b) approved by the department to determine the health risk level
of beneficiaries.

(12) (A) Managed care health plans shall assess an enrollee’s
current health risk by administering a risk assessment survey tool
approved by the department. This risk assessment survey shall be
performed within the following timeframes:

(i) Within 45 days of plan enrollment for individuals determined
to be at higher risk pursuant to paragraph (11).

(ii) Within 105 days of plan enrollment for individuals
determined to be at lower risk pursuant to paragraph (11).

(B) Based on the results of the current health risk assessment,
managed care health plans shall develop individual care plans for
higher risk beneficiaries that shall include the following minimum
components:

(i) Identification of medical care needs, including primary care,
specialty care, durable medical equipment, medications, and other
needs with a plan for care coordination as needed.

(ii) Identification of needs and referral to appropriate community
resources and other agencies as needed for services outside the
scope of responsibility of the managed care health plan.

(iii) Appropriate involvement of caregivers.

(iv) Determination of timeframes for reassessment and, if
necessary, circumstances or conditions that require redetermination
of risk level.

(13) (A) Establish medical homes to which enrollees are
assigned that include, at a minimum, all of the following elements,
which shall be considered in the provider contracting process:

(i) A primary care physician who is the primary clinician for
the beneficiary and who provides core clinical management
functions.

(ii) Care management and care coordination for the beneficiary
across the health care system including transitions among levels
of care.

(iii) Provision of referrals to qualified professionals, community
resources, or other agencies for services or items outside the scope
of responsibility of the managed care health plan.

(iv) Use of clinical data to identify beneficiaries at the care site
with chronic illness or other significant health issues.

(v) Timely preventive, acute, and chronic illness treatment in
the appropriate setting.

(vi) Use of clinical guidelines or other evidence-based medicine
when applicable for treatment of beneficiaries’ health care issues
or timing of clinical preventive services.

(B) In implementing this section, and the Special Terms and
Conditions of the demonstration project, the department may alter
the medical home elements described in this paragraph as necessary
to secure the increased federal financial participation associated
with the provision of medical assistance in conjunction with a
health home, as made available under the federal Patient Protection
and Affordable Care Act (Public Law 111-148), as amended by
the federal Health Care and Education Reconciliation Act of 2010
(Public Law 111-152), and codified in Section 1945 of Title XIX
of the federal Social Security Act. The department shall notify the
appropriate policy and fiscal committees of the Legislature of its
intent to alter medical home elements under this section at least
five days in advance of taking this action.

(14) Perform, at a minimum, the following care management
and care coordination functions and activities for enrollees who
are seniors or persons with disabilities:

(A) Assessment of each new enrollee’s risk level and health
needs shall be conducted through a standardized risk assessment
survey by means such as telephonic, Web-based, or in-person
communication or by other means as determined by the department.

(B) Facilitation of timely access to primary care, specialty care,
durable medical equipment, medications, and other health services
needed by the enrollee, including referrals to address any physical
or cognitive barriers to access.

(C) Active referral to community resources or other agencies
for needed services or items outside the managed care health plans
responsibilities.

(D) Facilitating communication among the beneficiaries’ health
care providers, including mental health and substance abuse
providers when appropriate.

(E) Other activities or services needed to assist beneficiaries in
optimizing their health status, including assisting with
self-management skills or techniques, health education, and other
modalities to improve health status.

(d) Except in a county where Medi-Cal services are provided
by a county-organized health system, and notwithstanding any
other provision of law, in any county in which fewer than two
existing managed care health plans contract with the department
to provide Medi-Cal services under this chapter, the department
may contract with additional managed care health plans to provide
Medi-Cal services for seniors and persons with disabilities and
other Medi-Cal beneficiaries.

(e) Beneficiaries enrolled in managed care health plans pursuant
to this section shall have the choice to continue an established
patient-provider relationship in a managed care health plan
participating in the demonstration project if his or her treating
provider is a primary care provider or clinic contracting with the
managed care health plan and agrees to continue to treat that
beneficiary.

(f) The department may contract with existing managed care
health plans to operate under the demonstration project to provide
or arrange for services under this section. Notwithstanding any
other provision of law, the department may enter into the contract
without the need for a competitive bid process or other contract
proposal process, provided the managed care health plan provides
written documentation that it meets all qualifications and
requirements of this section.

(g) This section shall be implemented only to the extent that
federal financial participation is available.

(h) (1) The development of capitation rates for managed care
health plan contracts shall include the analysis of data specific to
the seniors and persons with disabilities population. For the
purposes of developing capitation rates for payments to managed
care health plans, the director may require managed care health
plans, including existing managed care health plans, to submit
financial and utilization data in a form, time, and substance as
deemed necessary by the department.

(2) (A) Notwithstanding Section 14301, the department may
incorporate, on a one-time basis for a three-year period, a
risk-sharing mechanism in a contract with the local initiative health
plan in the county with the highest normalized fee-for-service risk
score over the normalized managed care risk score listed in Table
1.0 of the Medi-Cal Acuity Study Seniors and Persons with
Disabilities (SPD) report written by Mercer Government Human
Services Consulting and dated September 28, 2010, if the local
initiative health plan meets the requirements of subparagraph (B).
The Legislature finds and declares that this risk-sharing mechanism
will limit the risk of beneficial or adverse effects associated with
a contract to furnish services pursuant to this section on an at-risk
basis.

(B) The local initiative health plan shall pay the nonfederal
share of all costs associated with the development, implementation,
and monitoring of the risk-sharing mechanism established pursuant
to subparagraph (A) by means of intergovernmental transfers. The
nonfederal share includes the state costs of staffing, state
contractors, or administrative costs directly attributable to
implementing subparagraph (A).

(C) This subdivision shall be implemented only to the extent
federal financial participation is not jeopardized.

(i) Persons meeting participation requirements for the Program
of All-Inclusive Care for the Elderly (PACE) pursuant to Chapter
8.75 (commencing with Section 14591), may select a PACE plan
if one is available in that county.

(j) Persons meeting the participation requirements in effect on
January 1, 2010, for a Medi-Cal primary care case management
(PCCM) plan in operation on that date, may select that PCCM
plan or a successor health care plan that is licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code) to provide services within the same geographic area
that the PCCM plan served on January 1, 2010.

(k) Notwithstanding Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
the department may implement, interpret, or make specific this
section and any applicable federal waivers and state plan
amendments by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking regulatory
action. Prior to issuing any letter or similar instrument authorized
pursuant to this section, the department shall notify and consult
with stakeholders, including advocates, providers, and
beneficiaries. The department shall notify the appropriate policy
and fiscal committees of the Legislature of its intent to issue
instructions under this section at least five days in advance of the
issuance.

(l) Consistent with state law that exempts Medi-Cal managed
care contracts from Chapter 2 (commencing with Section 10290)
of Part 2 of Division 2 of the Public Contract Code, and in order
to achieve maximum cost savings, the Legislature hereby
determines that an expedited contract process is necessary for
contracts entered into or amended pursuant to this section. The
contracts and amendments entered into or amended pursuant to
this section shall be exempt from Chapter 2 (commencing with
Section 10290) of Part 2 of Division 2 of the Public Contract Code
and the requirements of State Administrative Management Manual
Memo 03-10. The department shall make the terms of a contract
available to the public within 30 days of the contract’s effective
date.

(m) In the event of a conflict between the Special Terms and
Conditions of the approved demonstration project, including any
attachment thereto, and any provision of this part, the Special
Terms and Conditions shall control. If the department identifies a
specific provision of this article that conflicts with a term or
condition of the approved waiver or demonstration project, or an
attachment thereto, the term or condition shall control, and the
department shall so notify the appropriate fiscal and policy
committees of the Legislature within 15 business days.

(n) In the event of a conflict between the provisions of this
article and any other provision of this part, the provisions of this
article shall control.

(o) Any otherwise applicable provisions of this chapter, Chapter
8 (commencing with Section 14200), or Chapter 8.75 (commencing
with Section 14591) not in conflict with this article or with the
terms and conditions of the demonstration project shall apply to
this section.

(p) To the extent that the director utilizes state plan amendments
or waivers to accomplish the purposes of this article in addition
to waivers granted under the demonstration project, the terms of
the state plan amendments or waivers shall control in the event of
a conflict with any provision of this part.

(q) (1) Enrollment of seniors and persons with disabilities into
a managed care health plan under this section shall be accomplished
using a phased-in process to be determined by the department and
shall not commence until necessary federal approvals have been
acquired or until June 1, 2011, whichever is later.

(2) Notwithstanding paragraph (1), and at the director’s
discretion, enrollment in Los Angeles County of seniors and
persons with disabilities may be phased-in over a 12-month period
using a geographic region method that is proposed by Los Angeles
County subject to approval by the department.

(r) A managed care health plan established pursuant to this
section, or under the Special Terms and Conditions of the
demonstration project pursuant to Section 14180, shall be subject
to, and comply with, the requirement for submission of encounter
data specified in Section 14182.1.

(s) (1) Commencing January 1, 2011, and until January 1, 2014,
the department shall provide the fiscal and policy committees of
the Legislature with semiannual updates regarding core activities
for the enrollment of seniors and persons with disabilities into
managed care health plans pursuant to the pilot program. The
semiannual updates shall include key milestones, progress toward
the objectives of the pilot program, relevant or necessary changes
to the program, submittal of state plan amendments to the federal
Centers for Medicare and Medicaid Services, submittal of any
federal waiver documents, and other key activities related to the
mandatory enrollment of seniors and persons with disabilities into
managed care health plans. The department shall also include
updates on the transition of individuals into managed care health
plans, the health outcomes of enrollees, the care management and
coordination process, and other information concerning the success
or overall status of the pilot program.

(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2015, pursuant to Section
10231.5 of the Government Code.

(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government
Code.

(t) The department, in collaboration with the State Department
of Social Services and county welfare departments, shall monitor
the utilization and caseload of the In-Home Supportive Services
(IHSS) program before and during the implementation of the pilot
program. This information shall be monitored in order to identify
the impact of the pilot program on the IHSS program for the
affected population.

(u) Services under Section 14132.95 or 14132.952, or Article
7 (commencing with Section 12300) of Chapter 3 that are provided
to individuals assigned to managed care health plans under this
section shall be provided through direct hiring of personnel,
contract, or establishment of a public authority or nonprofit
consortium, in accordance with and subject to the requirements of
Section 12302 or 12301.6, as applicable.

(v) The department shall, at a minimum, monitor on a quarterly
basis the adequacy of provider networks of the managed care health
plans.

(w) The department shall suspend new enrollment of seniors
and persons with disabilities into a managed care health plan if it
determines that the managed care health plan does not have
sufficient primary or specialty providers to meet the needs of their
enrollees.