Bill Text: CA AB1022 | 2023-2024 | Regular Session | Introduced
Bill Title: Medi-Cal: Program of All-Inclusive Care for the Elderly.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2024-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1022 Detail]
Download: California-2023-AB1022-Introduced.html
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 1022
| Introduced by Assembly Member Mathis |
February 15, 2023 |
An act to amend Sections 14132.275, 14132.725, and 14301.1 of the Welfare and Institutions Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
AB 1022, as introduced, Mathis.
Medi-Cal: Program of All-Inclusive Care for the Elderly.
Existing law provides for the Medi-Cal program, which is 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.
Existing federal law establishes the Program of All-Inclusive Care for the Elderly (PACE), which provides specified services for older individuals at a PACE center so that they may continue living in the community. Federal law authorizes states to implement PACE as a Medicaid state option. Existing state law establishes the California Program of All-Inclusive Care for the Elderly (PACE program) to provide community-based, risk-based, and capitated long-term care services as optional services under the state’s Medi-Cal state plan. Existing law requires the
department to develop and pay capitation rates to entities contracted through the PACE program using actuarial methods and that reflect the level of care associated with the specific populations served pursuant to the contract. Existing law authorizes a PACE organization approved by the department to use video telehealth to conduct initial assessments and annual reassessments for eligibility for enrollment in the PACE program.
This bill, among other things relating to the PACE program, would require those capitation rates to also reflect the frailty level and risk associated with those populations. The bill would also expand an approved PACE organization’s authority to use video telehealth to conduct all assessments, as specified.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 14132.275 of the Welfare and Institutions Code is amended to read:14132.275.
(a) The department shall seek federal approval to establish the demonstration project described in this section pursuant to a Medicare or a Medicaid demonstration project or waiver, or a combination of those. Under a Medicare demonstration, the department may contract with the federal Centers for Medicare and Medicaid Services (CMS) and demonstration sites to operate the Medicare and Medicaid benefits in a demonstration project that is overseen by the state as a delegated Medicare benefit administrator, and may enter into financing arrangements with CMS to share in any Medicare Program savings generated by the demonstration project.(b) After federal approval is obtained, the department shall establish the demonstration project that enables dual eligible
beneficiaries to receive a continuum of services that maximizes access to, and coordination of, benefits between the Medi-Cal and Medicare programs and access to the continuum of long-term services and supports and behavioral health services, including mental health and substance use disorder treatment services. The purpose of the demonstration project is to integrate services authorized under the federal Medicaid program (Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.)) and the federal Medicare Program (Title XVIII of the federal Social Security Act (42 U.S.C. Sec. 1395 et seq.)). The demonstration project may also include additional services as approved through a demonstration project or waiver, or a combination of those.
(c) For purposes of this section, the following definitions apply:
(1) “Behavioral health” means Medi-Cal services provided pursuant
to Section 51341 of Title 22 of the California Code of Regulations and Drug Medi-Cal substance abuse services provided pursuant to Section 51341.1 of Title 22 of the California Code of Regulations, and any mental health benefits available under the Medicare Program.
(2) “Capitated payment model” means an agreement entered into between CMS, the state, and a managed care health plan, in which the managed care health plan receives a capitation payment for the comprehensive, coordinated provision of Medi-Cal services and benefits under Medicare Part C (42 U.S.C. Sec. 1395w-21 et seq.) and Medicare Part D (42 U.S.C. Sec. 1395w-101 et seq.), and CMS shares the savings with the state from improved provision of Medi-Cal and Medicare services that reduces the cost of those services. Medi-Cal services include long-term services and supports as defined in Section 14186.1, behavioral health services, and any additional services offered by the demonstration
site.
(3) “Demonstration site” means a managed care health plan that is selected to participate in the demonstration project under the capitated payment model.
(4) “Dual eligible beneficiary” means an individual 21 years of age or older who is enrolled for benefits under Medicare Part A (42 U.S.C. Sec. 1395c et seq.) and Medicare Part B (42 U.S.C. Sec. 1395j et seq.) and is eligible for medical assistance under the Medi-Cal State Plan.
(d) No sooner than March 1, 2011, the department shall identify health care models that may be included in the demonstration project, shall develop a timeline and process for selecting, financing, monitoring, and evaluating the demonstration sites, and shall provide this timeline and process to the appropriate fiscal and policy committees of the Legislature. The department may
implement these demonstration sites in phases.
(e) The department shall provide the fiscal and appropriate policy committees of the Legislature with a copy of any report submitted to CMS to meet the requirements under the demonstration project.
(f) Goals for the demonstration project shall include all of the following:
(1) Coordinate Medi-Cal and Medicare benefits across health care settings and improve the continuity of care across acute care, long-term care, behavioral health, including mental health and substance use disorder services, and home- and community-based services settings using a person-centered approach.
(2) Coordinate access to acute and long-term care services for dual eligible beneficiaries.
(3) Maximize the ability of dual eligible beneficiaries to remain in their homes and communities with appropriate services and supports in lieu of institutional care.
(4) Increase the availability of and access to home- and community-based services.
(5) Coordinate access to necessary and appropriate behavioral health services, including mental health and substance use disorder services.
(6) Improve the quality of care for dual eligible beneficiaries.
(7) Promote a system that is both sustainable and person and family centered by providing dual eligible beneficiaries with timely access to appropriate, coordinated health care services and community resources that enable them to attain or maintain
personal health goals.
(g) No sooner than March 1, 2013, demonstration sites shall be established in up to eight counties, and shall include at least one county that provides Medi-Cal services through a two-plan model pursuant to Article 2.7 (commencing with Section 14087.3) and at least one county that provides Medi-Cal services under a county organized health system pursuant to Article 2.8 (commencing with Section 14087.5). The director shall consult with the Legislature, CMS, and stakeholders when determining the implementation date for this section. In determining the counties in which to establish a demonstration site, the director shall consider both of the following:
(1) Local support for integrating medical care, long-term care, and home- and community-based services networks.
(2) A local stakeholder process
that includes health plans, providers, mental health representatives, community programs, consumers, designated representatives of in-home supportive services personnel, and other interested stakeholders in the development, implementation, and continued operation of the demonstration site.
(h) In developing the process for selecting, financing, monitoring, and evaluating the health care models for the demonstration project, the department shall enter into a memorandum of understanding with CMS. Upon completion, the memorandum of understanding shall be provided to the fiscal and appropriate policy committees of the Legislature and posted on the department’s internet website.
(i) The department shall negotiate the terms and conditions of the memorandum of understanding, which shall address, but are not limited to, all of the following:
(1) Reimbursement methods for a capitated payment model. Under the capitated payment model, the demonstration sites shall meet all of the following requirements:
(A) Have Medi-Cal managed care health plan and Medicare dual eligible-special needs plan contract experience, or evidence of the ability to meet these contracting requirements.
(B) Be in good financial standing and meet licensure requirements under 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), except for county organized health system plans that are exempt from licensure pursuant to Section 14087.95.
(C) Meet quality measures, which may include Medi-Cal and Medicare Healthcare Effectiveness Data and
Information Set measures and other quality measures determined or developed by the department or CMS.
(D) Demonstrate a local stakeholder process that includes dual eligible beneficiaries, managed care health plans, providers, mental health representatives, county health and human services agencies, designated representatives of in-home supportive services personnel, and other interested stakeholders that advise and consult with the demonstration site in the development, implementation, and continued operation of the demonstration project.
(E) Pay providers reimbursement rates sufficient to maintain an adequate provider network and ensure access to care for beneficiaries.
(F) Follow final policy guidance determined by CMS and the department with regard to reimbursement rates for providers pursuant to paragraphs (4)
to (7), inclusive, of subdivision (o).
(G) To the extent permitted under the demonstration, pay noncontracted hospitals prevailing Medicare fee-for-service rates for traditionally Medicare covered benefits and prevailing Medi-Cal fee-for-service rates for traditionally Medi-Cal covered benefits.
(2) Encounter data reporting requirements for both Medi-Cal and Medicare services provided to beneficiaries enrolling in the demonstration project.
(3) Quality assurance withholding from the demonstration site payment, to be paid only if quality measures developed as part of the memorandum of understanding and plan contracts are met.
(4) Provider network adequacy standards developed by the department and CMS, in consultation with the Department of Managed Health
Care, the demonstration site, and stakeholders.
(5) Medicare and Medi-Cal appeals and hearing process.
(6) Unified marketing requirements and combined review process by the department and CMS.
(7) Combined quality management and consolidated reporting process by the department and CMS.
(8) Procedures related to combined federal and state contract management to ensure access, quality, program integrity, and financial solvency of the demonstration site.
(9) To the extent permissible under federal requirements, implementation of the provisions of Sections 14182.16 and 14182.17 that are applicable to beneficiaries simultaneously eligible for full-scope benefits under Medi-Cal and the Medicare
Program.
(10) (A) In consultation with the hospital industry, CMS approval to ensure that Medicare supplemental payments for direct graduate medical education and Medicare add-on payments, including indirect medical education and disproportionate share hospital adjustments continue to be made available to hospitals for services provided under the demonstration.
(B) The department shall seek CMS approval for CMS to continue these payments either outside the capitation rates or, if contained within the capitation rates, and to the extent permitted under the demonstration project, shall require demonstration sites to provide this reimbursement to hospitals.
(11) To the extent permitted under the demonstration project, the default rate for noncontracting providers of physician services shall be the
prevailing Medicare fee schedule for services covered by the Medicare Program and the prevailing Medi-Cal fee schedule for services covered by the Medi-Cal program.
(j) (1) The department shall comply with and enforce the terms and conditions of the memorandum of understanding with CMS, as specified in subdivision (i). To the extent that the terms and conditions do not address the specific selection, financing, monitoring, and evaluation criteria listed in subdivision (i), the department:
(A) Shall require the demonstration site to do all of the following:
(i) Comply with additional site readiness criteria specified by the department.
(ii) Comply with long-term services and supports requirements in accordance with Article 5.7
(commencing with Section 14186).
(iii) To the extent permissible under federal requirements, comply with the provisions of Sections 14182.16 and 14182.17 that are applicable to beneficiaries simultaneously eligible for full-scope benefits under both Medi-Cal and the Medicare Program.
(iv) Comply with all transition of care requirements for Medicare Part D benefits as described in Chapters 6 and 14 of the Medicare Managed Care Manual, published by CMS, including transition timeframes, notices, and emergency supplies.
(B) May require the demonstration site to forgo charging premiums, coinsurance, copayments, and deductibles for Medicare Part C and Medicare Part D services.
(2) The department shall notify the Legislature within 30 days of the
implementation of the requirements in paragraph (1).
(k) The director may enter into exclusive or nonexclusive contracts on a bid or negotiated basis and may amend existing managed care contracts to provide or arrange for services provided under this section. Contracts entered into or amended pursuant to this section shall be exempt from the provisions of Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code and Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code.
(l) (1) (A) Except for the exemptions provided for in this section and in Section 14132.277, the department shall enroll dual eligible beneficiaries into a demonstration site unless the beneficiary makes an affirmative choice to opt out of enrollment or is already enrolled on or
before June 1, 2013, in a managed care organization licensed under 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) that has previously contracted with the department as a primary care case management plan pursuant to Article 2.9 (commencing with Section 14088) to provide services to beneficiaries who are HIV positive or who have been diagnosed with AIDS or in any entity with a contract with the department pursuant to Chapter 8.75 (commencing with Section 14591).
(B) Dual eligible beneficiaries who opt out of enrollment into a demonstration site may choose to remain enrolled in fee-for-service Medicare or a Medicare Advantage plan for their Medicare benefits, but shall be mandatorily enrolled into a Medi-Cal managed care health plan pursuant to Section 14182.16, except as exempted under subdivision (c) of Section 14182.16.
(C) (i) Persons meeting requirements for the Program of All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75 (commencing with Section 14591) or a managed care organization licensed under 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) that has previously contracted with the department as a primary care case management plan pursuant to Article 2.9 (commencing with Section 14088) of Chapter 7 to provide services to beneficiaries who are HIV positive or who have been diagnosed with AIDS may select either of these managed care health plans for their Medicare and Medi-Cal benefits if one is available in that county.
(ii) In areas where a PACE plan is available, the PACE plan shall be presented as an enrollment option, included in all enrollment materials,
enrollment assistance programs, and outreach programs related to the demonstration project, and made available to beneficiaries whenever enrollment choices and options are presented. presented by the department or any contractor of the department. Persons meeting the age qualifications for PACE and who choose PACE shall remain in the fee-for-service Medi-Cal and Medicare programs, and shall not be assigned to a managed care health plan for the lesser of 60 days or until they are assessed for eligibility for PACE and determined not to be eligible for a PACE plan. Persons enrolled in a PACE plan shall receive all Medicare and Medi-Cal services from the PACE program pursuant to the three-way agreement between the PACE program, the department, and the Centers for Medicare and Medicaid Services.
(2) To the extent that federal approval is obtained, the department may require that any beneficiary, upon enrollment in a demonstration site, remain enrolled in the Medicare portion of the demonstration project on a mandatory basis for six months from the date of initial enrollment. After the sixth month, a dual eligible beneficiary may elect to enroll in a different demonstration site, a different Medicare Advantage plan, fee-for-service Medicare, PACE, or a managed care organization licensed under 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) that has previously contracted with the department as a primary care case management plan pursuant to Article 2.9 (commencing with Section 14088) to provide services to beneficiaries who are HIV positive or who have been diagnosed with AIDS, for their Medicare benefits.
(A) During the six-month mandatory enrollment in a demonstration site, a beneficiary may continue receiving services from an out-of-network Medicare provider for primary and specialty care services only if all of the following criteria are met:
(i) The dual eligible beneficiary demonstrates an existing relationship with the provider before enrollment in a demonstration site.
(ii) The provider is willing to accept payment from the demonstration site based on the current Medicare fee schedule.
(iii) The demonstration site would not otherwise exclude the provider from its provider network due to documented quality of care concerns.
(B) The department shall develop a process to inform providers and
beneficiaries of the availability of continuity of services from an existing provider and ensure that the beneficiary continues to receive services without interruption.
(3) (A) Notwithstanding subparagraph (A) of paragraph (1), a dual eligible beneficiary shall be excluded from enrollment in the demonstration project if the beneficiary meets any of the following:
(i) The beneficiary has a prior diagnosis of end-stage renal disease. This clause does not apply to beneficiaries diagnosed with end-stage renal disease subsequent to enrollment in the demonstration project. The director may, with stakeholder input and federal approval, authorize beneficiaries with a prior diagnosis of end-stage renal disease in specified counties to voluntarily enroll in the demonstration project.
(ii) The beneficiary
has other health coverage, as defined in paragraph (5) of subdivision (b) of Section 14182.16.
(iii) The beneficiary is enrolled in a home- and community-based waiver that is a Medi-Cal benefit under Section 1915(c) of the federal Social Security Act (42 U.S.C. Sec. 1396n et seq.), except for persons enrolled in Multipurpose Senior Services Program services or beneficiaries receiving services through a regional center who resides in the County of San Mateo.
(iv) The beneficiary is receiving services through a regional center or state developmental center. However, a beneficiary receiving services through a regional center who resides in the County of San Mateo, by making an affirmative choice to opt in, may voluntarily enroll in the demonstration project, upon receipt of all legal notifications required pursuant to this section and applicable federal requirements.
(v) The beneficiary resides in a geographic area or ZIP Code not included in managed care, as determined by the department and CMS.
(vi) The beneficiary resides in one of the Veterans’ Homes of California, as described in Chapter 1 (commencing with Section 1010) of Division 5 of the Military and Veterans Code.
(B) (i) Beneficiaries who have been diagnosed with HIV/AIDS may opt out of the demonstration project at the beginning of any month. The State Department of Public Health may share relevant data relating to a beneficiary’s enrollment in the AIDS Drug Assistance Program with the department, and the department may share relevant data relating to HIV-positive beneficiaries with the State Department of Public Health.
(ii) The
information provided by the State Department of Public Health pursuant to this subparagraph shall not be further disclosed by the State Department of Health Care Services, and shall be subject to the confidentiality protections of subdivisions (d) and (e) of Section 121025 of the Health and Safety Code, except this information may be further disclosed as follows:
(I) To the person to whom the information pertains or the designated representative of that person.
(II) To the Office of AIDS within the State Department of Public Health.
(C) Beneficiaries who are Indians receiving Medi-Cal services in accordance with Section 55110 of Title 22 of the California Code of Regulations may opt out of the demonstration project at the beginning of any month.
(D) The
department, with stakeholder input, may exempt specific categories of dual eligible beneficiaries from enrollment requirements in this section based on extraordinary medical needs of specific patient groups or to meet federal requirements.
(4) For the 2013 calendar year, the department shall offer federal Medicare Improvements for Patients and Providers Act of 2008 (Public Law 110-275) compliant contracts to existing Medicare Advantage Dual Special Needs Plans (D-SNP) to continue to provide Medicare benefits to their enrollees in their service areas as approved on January 1, 2012. In the 2013 calendar year, beneficiaries in Medicare Advantage and D-SNP plans shall be exempt from the enrollment requirements of subparagraph (A) of paragraph (1), but may voluntarily choose to enroll in the demonstration project. Enrollment into the demonstration project’s managed care health plans shall be reassessed in 2014 depending on federal reauthorization of
the D-SNP model and the department’s assessment of the demonstration plans.
(5) For the 2013 calendar year, demonstration sites shall not offer to enroll dual eligible beneficiaries eligible for the demonstration project into the demonstration site’s D-SNP.
(6) The department shall not terminate contracts in a demonstration site with a managed care organization licensed under 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) that has previously contracted with the department as a primary care case management plan pursuant to Article 2.9 (commencing with Section 14088) to provide services to beneficiaries who are HIV positive beneficiaries or who have been diagnosed with AIDS and with any entity with a contract pursuant to Chapter 8.75 (commencing with Section 14591), except as provided in
the contract or pursuant to state or federal law.
(m) Notwithstanding Section 10231.5 of the Government Code, the department shall conduct an evaluation, in partnership with CMS, to assess outcomes and the experience of dual eligibles in these demonstration sites and shall provide a report to the Legislature after the first full year of demonstration operation, and annually thereafter. A report submitted to the Legislature pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code. The department shall consult with stakeholders regarding the scope and structure of the evaluation.
(n) This section shall be implemented only if and to the extent that federal financial participation or funding is available.
(o) It is the intent of the Legislature that:
(1) In order to maintain adequate provider networks, demonstration sites shall reimburse providers at rates sufficient to ensure access to care for beneficiaries.
(2) Savings under the demonstration project are intended to be achieved through shifts in utilization, and not through reduced reimbursement rates to providers.
(3) Reimbursement policies shall not prevent demonstration sites and providers from entering into payment arrangements that allow for the alignment of financial incentives and provide opportunities for shared risk and shared savings in order to promote appropriate utilization shifts, which encourage the use of home- and community-based services and quality of care for dual eligible beneficiaries enrolled in the demonstration sites.
(4) To
the extent permitted under the demonstration project, and to the extent that a public entity voluntarily provides an intergovernmental transfer for this purpose, both of the following shall apply:
(A) The department shall work with CMS in ensuring that the capitation rates under the demonstration project are inclusive of funding currently provided through certified public expenditures supplemental payment programs that would otherwise be impacted by the demonstration project.
(B) Demonstration sites shall pay to a public entity voluntarily providing intergovernmental transfers that previously received reimbursement under a certified public expenditures supplemental payment program, rates that include the additional funding under the capitation rates that are funded by the public entity’s intergovernmental transfer.
(5) The department shall work with CMS in developing other reimbursement policies and shall inform demonstration sites, providers, and the Legislature of the final policy guidance.
(6) The department shall seek approval from CMS to permit the provider payment requirements contained in subparagraph (G) of paragraph (1) and paragraphs (10) and (11) of subdivision (i), and Section 14132.276.
(7) Demonstration sites that contract with hospitals for hospital services on a fee-for-service basis that otherwise would have been traditionally Medicare services will achieve savings through utilization changes and not by paying hospitals at rates lower than prevailing Medicare fee-for-service rates.
(p) The department shall enter into an interagency agreement with the Department of Managed Health Care to perform
some or all of the department’s oversight and readiness review activities specified in this section. These activities may include providing consumer assistance to beneficiaries affected by this section and conducting financial audits, medical surveys, and a review of the adequacy of provider networks of the managed care health plans participating in this section. The interagency agreement shall be updated, as necessary, on an annual basis in order to maintain functional clarity regarding the roles and responsibilities of the Department of Managed Health Care and the department. The department shall not delegate its authority under this section as the single state Medicaid agency to the Department of Managed Health Care. Notwithstanding any other law, this subdivision shall be operative only through June 30, 2017.
(q) (1) Beginning with the May Revision to the 2013–14 Governor’s Budget, and annually thereafter, the
department shall report to the Legislature on the enrollment status, quality measures, and state costs of the actions taken pursuant to this section.
(2) (A) By January 1, 2013, or as soon thereafter as practicable, the department shall develop, in consultation with CMS and stakeholders, quality and fiscal measures for health plans to reflect the short- and long-term results of the implementation of this section. The department shall also develop quality thresholds and milestones for these measures. The department shall update these measures periodically to reflect changes in this program due to implementation factors and the structure and design of the benefits and services being coordinated by managed care health plans.
(B) The department shall require health plans to submit Medicare and Medi-Cal data to determine the results of these measures. If the
department finds that a health plan is not in compliance with one or more of the measures set forth in this section, the health plan shall, within 60 days, submit a corrective action plan to the department for approval. The corrective action plan shall, at a minimum, include steps that the health plan shall take to improve its performance based on the standard or standards with which the health plan is out of compliance. The plan shall establish interim benchmarks for improvement that shall be expected to be met by the health plan in order to avoid a sanction pursuant to Section 14197.7. This subparagraph is not intended to limit Section 14197.7.
(C) The department shall publish the results of these measures, including by posting on the department’s internet website, on a quarterly basis.
(r) 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. Before 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.
(s) (1) Notwithstanding any other law, the demonstration project described in this section shall remain operative only through December 31, 2022, subject to subdivision (f) of Section 14184.102.
(2) This section shall remain in effect only until January 1, 2025, and as of that date is repealed.
SEC. 2.
Section 14132.725 of the Welfare and Institutions Code is amended to read:14132.725.
(a) For purposes of this section, the following definitions apply:(1) “Border community” means border areas adjacent to the State of California where it is customary practice for California residents to use medical resources in adjacent areas outside the state. Under these circumstances, program controls and limitations are the same as for services rendered by health care providers within the state.
(2) “Health care provider” has the same meaning as set forth in paragraph (3) of subdivision (a) of Section 2290.5 of the Business and Professions Code, and shall be either enrolled as a Medi-Cal rendering provider, or a nonphysician medical practitioner affiliated with an enrolled Medi-Cal provider
group. “Health care provider” also includes any provider type designated by the department pursuant to subparagraph (A) of paragraph (2) of subdivision (b). The enrolled Medi-Cal provider or provider group for which the health care provider renders services via telehealth shall meet all Medi-Cal requirements and shall be located in the state or a border community.
(3) “Health care service plan” has the same meaning as set forth in subdivision (f) of Section 1345 of the Health and Safety Code.
(4) “Medi-Cal managed care plan” has the same meaning as set forth in subdivision (j) of Section 14184.101.
(5) “Network provider” has the same meaning as set forth in Section 438.2 of Title 42 of the Code of Federal Regulations.
(6) “Telehealth” has the same
meaning as set forth in paragraph (6) of subdivision (a) of Section 2290.5 of the Business and Professions Code.
(b) (1) Subject to subdivision (k), in-person, face-to-face contact between a health care provider and a patient is not required under the Medi-Cal program for covered health care services and provider types designated by the department, when provided by video synchronous interaction, asynchronous store and forward, as defined in subdivision (a) of Section 2290.5 of the Business and Professions Code, audio-only synchronous interaction, remote patient monitoring, or other permissible virtual communication modalities, when those services and settings meet the applicable standard of care and meet the requirements of the service code being billed.
(2) (A) In implementing this section, the department shall designate and
periodically update the covered health care services and provider types, including required licensing and credentialing criteria, as applicable, which may be appropriately delivered via the telehealth modalities described in this subdivision.
(B) Applicable health care services appropriately provided through video synchronous interaction, asynchronous store and forward, audio-only synchronous interaction, remote patient monitoring, or other permissible virtual communication modalities are subject to billing, reimbursement, and utilization management policies imposed by the department. Subject to subdivision (k), utilization management protocols adopted by the department pursuant to this section shall be consistent with, and no more restrictive than, those authorized for health care service plans pursuant to Section 1374.13 of the Health and Safety Code.
(c) (1) (A) Pursuant to an effective date designated by the department that is no sooner than January 1, 2024, a Medi-Cal provider furnishing applicable health care services via audio-only synchronous interaction shall also offer those same health care services via video synchronous interaction to preserve beneficiary choice.
(B) (i) The department may provide specific exceptions to the requirement specified in subparagraph (A), based on a Medi-Cal provider’s access to requisite technologies, which shall be developed in consultation with affected stakeholders and published in departmental guidance.
(ii) In making exceptions to the requirement specified in subparagraph (A), in addition to the provisions in clause (i), the department may also take into consideration the availability of broadband access based on speed standards set
by the Federal Communications Commission, pursuant to Section 706 of the Telecommunications Act of 1996 (Pub. L. No. 104-104) or other applicable federal law or regulation.
(2) Effective on the date designated by the department pursuant to paragraph (1), a provider furnishing services through video synchronous interaction or audio-only synchronous interaction shall also do one of the following:
(A) Offer those services via in-person, face-to-face contact.
(B) Arrange for a referral to, and a facilitation of, in-person care that does not require a patient to independently contact a different provider to arrange for that care.
(3) In implementing this subdivision, the department shall consider additional recommendations from affected stakeholders
regarding the need to maintain access to in-person services without unduly restricting access to telehealth services.
(4) A health care provider may establish a new patient relationship with a Medi-Cal beneficiary via video synchronous interaction consistent with any requirements imposed by the department.
(5) (A) A health care provider shall not establish a new patient relationship with a Medi-Cal beneficiary via asynchronous store and forward, telephonic (audio-only) synchronous interaction, remote patient monitoring, or other virtual communication modalities, except as set forth in paragraph (4) of subdivision (g) of Section 14132.100.
(B) Notwithstanding the prohibition in subparagraph (A), the department may provide for specific exceptions to this prohibition, the department may provide for
specific exceptions described in clauses (i) and (ii), which shall be developed in consultation with affected stakeholders and published in departmental guidance.
(i) Notwithstanding the prohibition in subparagraph (A), a health care provider may establish a new patient relationship using an audio-only synchronous interaction when the visit is related to sensitive services, as defined in subdivision (n) of Section 56.05 of the Civil Code, and when established in accordance with department specific requirements and consistent with federal and state law, regulations and guidance.
(ii) Notwithstanding the prohibition in subparagraph (A), a health care provider may establish a new patient relationship using an audio-only synchronous interaction when the patient requests an audio-only modality or attests they do not have access to video, and when established in accordance with
department specific requirements and consistent with federal and state laws, regulations and guidance.
(6) Subject to subdivision (k), the department may establish separate fee schedules for applicable health care services delivered via remote patient monitoring or other permissible virtual communication modalities.
(7) This subdivision does not apply to Medi-Cal covered services delivered by providers via any telehealth modality to eligible inmates in state prisons, county jails, or youth correctional facilities.
(d) In addition to any existing law requiring beneficiary consent to telehealth, including, but not limited to, subdivision (b) of Section 2290.5 of the Business and Professions Code, all of the following shall be communicated by a health care provider to a Medi-Cal beneficiary, in writing or verbally, on
at least one occasion prior to, or concurrent with, initiating the delivery of one or more health care services via telehealth to a Medi-Cal beneficiary: an explanation that beneficiaries have the right to access covered services that may be delivered via telehealth through an in-person, face-to-face visit; an explanation that use of telehealth is voluntary and that consent for the use of telehealth can be withdrawn at any time by the Medi-Cal beneficiary without affecting their ability to access covered Medi-Cal services in the future; an explanation of the availability of Medi-Cal coverage for transportation services to in-person visits when other available resources have been reasonably exhausted; and the potential limitations or risks related to receiving services through telehealth as compared to an in-person visit, to the extent any limitations or risks are identified by the provider.
(1) The provider shall document in the patient record
the provision of this information and the patient’s verbal or written acknowledgment that the information was received.
(2) The department shall develop, in consultation with affected stakeholders, model language for purposes of the communication described in this subdivision.
(3) This subdivision does not apply to Medi-Cal covered services delivered by providers via any telehealth modality to eligible inmates in state prisons, county jails, or youth correctional facilities.
(e) (1) The department shall develop, in consultation with affected stakeholders, an informational notice to be distributed to fee-for-service Medi-Cal beneficiaries and for use by Medi-Cal managed care plans in communicating to their enrollees. Information in the notice shall include, but not be limited to, all of the
following:
(A) The availability of Medi-Cal covered telehealth services.
(B) The beneficiary’s right to access all medically necessary covered services through in-person, face-to-face visits, and a provider’s and Medi-Cal managed care plan’s responsibility to offer or arrange for that in-person care, as applicable.
(C) An explanation that use of telehealth is voluntary and that consent for the use of telehealth can be withdrawn by the Medi-Cal beneficiary at any time without affecting their ability to access covered Medi-Cal services in the future.
(D) An explanation of the availability of Medi-Cal coverage for transportation services to in-person visits when other available resources have been reasonably exhausted.
(E) Notification of the beneficiary’s right to make complaints about the offer of telehealth services in lieu of in-person care or about the quality of care delivered through telehealth.
(2) The informational notice shall be translated into threshold languages determined by the department pursuant to subdivision (b) of Section 14029.91 and provided in a format that is culturally and linguistically appropriate.
(3) This subdivision does not apply to Medi-Cal covered services delivered by providers via any telehealth modality to eligible inmates in state prisons, county jails, or youth correctional facilities.
(f) (1) Subject to subdivision (k), the department shall reimburse health care providers of applicable health care services
delivered via video synchronous interaction, synchronous audio-only modality, or asynchronous store and forward, as applicable, at payment amounts that are not less than the amounts the provider would receive if the services were delivered via in-person, face-to-face contact, so long as the services or settings meet the applicable standard of care and meet the requirements of the service code being billed.
(2) Subject to subdivision (k), for applicable health care services appropriately provided by a network provider via video synchronous interaction, audio-only synchronous interaction modality, or asynchronous store and forward, as applicable, to an enrollee of a Medi-Cal managed care plan, the Medi-Cal managed care plan shall reimburse the network provider at payment amounts that are not less than the amounts the network provider would have received if the services were delivered via in-person, face-to-face contact, unless the Medi-Cal
managed care plan and network provider mutually agree to reimbursement in different amounts.
(g) On or before January 1, 2023, the department shall develop a research and evaluation plan that does all of the following:
(1) Proposes strategies to analyze the relationship between telehealth and the following: access to care, access to in-person care, quality of care, and Medi-Cal program costs, utilization, and program integrity.
(2) Examines issues using an equity framework that includes stratification by available geographic and demographic factors, including, but not limited to, race, ethnicity, primary language, age, and gender, to understand inequities and disparities in care.
(3) Prioritizes research and evaluation questions that directly inform
Medi-Cal policy.
(h) Applicable health care services provided through asynchronous store and forward, video synchronous interaction, audio-only synchronous interaction, remote patient monitoring, or other permissible virtual communication modalities as described in this section shall comply with the privacy and security requirements contained in the federal Health Insurance Portability and Accountability Act of 1996 found in Parts 160 and 164 of Title 45 of the Code of Federal Regulations, the Medicaid State Plan, and any other applicable state and federal statutes and regulations.
(i) 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, and make specific this section by means of all-county letters, plan letters, provider bulletins, and similar instructions, without taking
any further regulatory action.
(j) Consistent with the requirements of this section and subject to subdivision (k), a PACE organization approved by the department pursuant to Chapter 8.75 (commencing with Section 14591) may use video telehealth to conduct initial assessments and annual re-assessments for eligibility for enrollment in the PACE program. assessments as identified in Section 460.104 of Title 42 of the Code of Federal Regulations.
(k) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and
is not otherwise jeopardized.
(l) This section shall be operative on January 1, 2023, or on the operative date or dates reflected in the applicable federal approvals obtained by the department pursuant to subdivision (k), whichever is later.
(m) This section does not apply to health care services provided via telehealth in an FQHC or RHC visit as described in paragraph (4) of subdivision (g) of Section 14132.100.
SEC. 3.
Section 14301.1 of the Welfare and Institutions Code is amended to read:14301.1.
(a) For rates established on or after August 1, 2007, the department shall pay capitation rates to health plans participating in the Medi-Cal managed care program using actuarial methods and may establish health-plan- and county-specific rates. Notwithstanding any other law, this section shall apply to any managed care organization, licensed under 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), that has contracted with the department as a primary care case management plan pursuant to Article 2.9 (commencing with Section 14088) of Chapter 7 to provide services to beneficiaries who are HIV positive or who have been diagnosed with AIDS for rates established on or after July 1, 2012. The department shall utilize a county- and model-specific rate methodology to develop Medi-Cal managed care capitation rates for contracts entered into between the department and any entity pursuant to Article 2.7 (commencing with Section 14087.3), Article 2.8 (commencing with Section 14087.5), and Article 2.91 (commencing with Section 14089) of Chapter 7 that includes, but is not limited to, all of the following:(1) Health-plan-specific encounter and claims data.
(2) Supplemental utilization and cost data submitted by the health plans.
(3) Fee-for-service data for the underlying county of operation or other appropriate counties as deemed necessary by the department.
(4) Department of Managed Health Care financial statement data specific to Medi-Cal operations.
(5) Other demographic factors, such as age, gender, or diagnostic-based risk adjustments, as the department deems appropriate.
(b) To the extent that the department is unable to obtain sufficient actual plan data, it may substitute plan model, similar plan, or county-specific fee-for-service data.
(c) The department shall develop rates that include administrative costs, and may apply different administrative costs with respect to separate aid code groups.
(d) The department shall develop rates that shall include, but are not limited to, assumptions for underwriting, return on investment, risk, contingencies, changes in policy, and a detailed review of health plan financial statements to validate and reconcile costs for use in developing rates.
(e) The department may develop rates that pay plans based on performance incentives, including quality indicators, access to care, and data submission.
(f) The department may develop and adopt condition-specific payment rates for health conditions, including, but not limited to, childbirth delivery.
(g) (1) Before finalizing Medi-Cal managed care capitation rates, the department shall provide health plans with information on how the rates were developed, including rate sheets for that specific health plan, and provide the plans with the opportunity to provide additional supplemental information.
(2) For contracts entered into between the department and any entity pursuant to Article 2.8 (commencing with Section 14087.5) of Chapter 7,
the department, by June 30 of each year, or, if the budget has not passed by that date, no later than five working days after the budget is signed, shall provide preliminary rates for the upcoming fiscal year.
(h) For the purposes of developing capitation rates through implementation of this ratesetting methodology, Medi-Cal managed care health plans shall provide the department with financial and utilization data in a form and substance as deemed necessary by the department to establish rates. These data shall be considered proprietary and shall be exempt from disclosure as official information pursuant to Section 7927.705 of the Government Code as contained in the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).
(i) Notwithstanding any other law, on and after the effective date of the act adding this subdivision,
the department may apply this section to the capitation rates it pays under any managed care health plan contract.
(j) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may set and implement managed care capitation rates, and interpret or make specific this section and any applicable federal waivers and state plan amendments by means of plan letters, plan or provider bulletins, or similar instructions, without taking regulatory action.
(k) (1) The department shall report, upon request, to the fiscal and policy committees of the respective houses of the Legislature regarding implementation of this section.
(2) The department shall publish on its public internet website a description of the rate methodology, data
used for rate development, and core actuarial assumptions and adjustments in each year that the department develops rates pursuant to this section.
(l) Before October 1, 2011, the risk-adjusted countywide capitation rate shall comprise no more than 20 percent of the total capitation rate paid to each Medi-Cal managed care plan.
(m) (1) It is the intent of the Legislature to preserve the policy goal to support and strengthen traditional safety net providers who treat high volumes of uninsured and Medi-Cal patients when Medi-Cal enrollees are defaulted into Medi-Cal managed care plans.
(2) As the department adds additional factors, such as managed care plan costs, to the Medi-Cal managed care plan default assignment algorithm, it shall consult with the Auto Assignment Performance Incentive
Program stakeholder workgroup to develop cost factor disregards related to intergovernmental transfers and required wraparound payments that support safety net providers.
(n) (1) The department shall develop and pay capitation rates to entities contracted pursuant to Chapter 8.75 (commencing with Section 14591), using actuarial methods and in a manner consistent with this section, except as provided in this subdivision.
(2) (A) The department may develop capitation rates using a standardized rate methodology across managed care plan models for comparable populations. The specific rate methodology applied to PACE organizations shall address features of PACE that distinguishes it from other managed care plan models.
(B) The rate methodology shall be consistent with actuarial
rate development principles and shall provide for all reasonable, appropriate, and attainable costs for each PACE organization within a region.
(3) The department may develop statewide rates and apply geographic adjustments, using available data sources deemed appropriate by the department. Consistent with actuarial methods, the primary source of data used to develop rates for each PACE organization shall be its Medi-Cal cost and utilization data or other data sources as deemed necessary by the department.
(4) Rates developed pursuant to this subdivision shall reflect the level of care care, frailty level, and risk associated with the specific populations served under the contract.
(5) The rate methodology developed pursuant to this subdivision shall contain a mechanism to account for the costs of high-cost drugs and treatments.
(6) Rates developed pursuant to this subdivision shall be actuarially certified before implementation.
(7) The department shall consult with those entities contracted pursuant to Chapter 8.75 (commencing with Section 14591) in developing a rate methodology according to this subdivision.
(8) Consistent with the requirements of federal law, the department shall calculate an upper payment limit for payments to PACE organizations. In calculating the upper payment limit, the department shall correct the applicable data as necessary and shall consider the risk of nursing home placement for the comparable population
when estimating the level of care and risk of PACE participants.
(9) The department shall pay the entity at a rate within the certified actuarially sound rate range developed with respect to that entity, to the extent consistent with federal requirements and subject to paragraph (11), as necessary to mitigate the impact to the entity of the methodology developed pursuant to this subdivision.
(10) During the first two years in which a new PACE organization or existing PACE organization enters a previously unserved area, the department shall pay at a rate within the certified actuarially sound rate range developed with respect to that entity, to the extent consistent with federal requirements and subject to paragraph (11), to reflect the lower enrollment and higher operating costs associated with a new PACE organization relative to a PACE organization with higher enrollment and more
experience providing managed care interventions to its beneficiaries.
(11) This subdivision shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available.
(12) This subdivision shall apply for rates implemented no earlier than January 1, 2017.
(o) (1) Notwithstanding any other law, as a component of the CalAIM Initiative authorized pursuant to Article 5.51 (commencing with Section 14184.100) of Chapter 7, and any successor waiver, demonstration, or state plan amendment authorizing the Medi-Cal managed care program, the department may establish capitation rates to contracted health plans on a regional basis in lieu of health plan and county-specific rates.
(2) Before initially implementing regional-based capitation rates under this subdivision, the department shall report to the Legislature on the process for developing those regional rates and determining the regional groups.
(3) The department shall provide a briefing to providers and stakeholders, including, but not limited to, physicians, hospitals, and consumer advocates, that describes the actuarial assumptions and rate methodologies used by the department following submission of rates to the federal government for approval that initially implement regional-based capitation rates under this subdivision. This publicly noticed meeting to providers and other stakeholders shall occur no more than 60 days after submission of the capitation rates to the federal government for approval. The meeting shall be for explanatory purposes and shall not otherwise impact the methodology and data provided to the federal government for
approval.
(4) The department shall consult with affected contracted health plans in developing the regional groups and rate methodologies, consistent with applicable federal requirements, actuarial methods, and the CalAIM Terms and Conditions as defined in subdivision (c) of Section 14184.101 prior to implementing this subdivision. In developing and implementing any methodology pursuant to this subdivision, the department shall seek to incentivize improved quality and outcomes for Medi-Cal managed care enrollees.
(5) This subdivision shall be implemented only to the extent that the department obtains any necessary federal approvals, and that federal financial participation is available and not otherwise jeopardized.
(p) (1) It is the intent of the Legislature that both affected contracted health
plans and the state have appropriate actuarial protections against the risk of either significant overpayments or significant underpayments in capitation rates developed and paid pursuant to this section that are associated with the changes to the Medi-Cal managed care program described in Article 5.51 (commencing with Section 14184.100) of Chapter 7, as identified by the department.
(2) (A) Notwithstanding any other law, as a component of the CalAIM initiative authorized pursuant to Article 5.51 (commencing with Section 14184.100) of Chapter 7, and any successor waiver, demonstration, or state plan amendment authorizing the Medi-Cal managed care program, the department may develop and implement appropriate actuarial methods to prevent significant overpayments or significant underpayments as described in paragraph (1), subject to paragraph (4). This may include, but need not be limited to, one or more of the following:
(i) A medical or profit and loss risk corridor.
(ii) Blended capitation rates based on projected member risk.
(iii) Other prospective or retrospective shared savings or risk models.
(B) The methods or models described in subparagraph (A) shall seek to encourage quality improvement and promote appropriate utilization incentives, including, but not limited to, reduced rehospitalization and shorter lengths of institutional stay.
(3) The department shall consult with affected contracted health plans in implementing this subdivision.
(4) This subdivision shall be implemented only to the extent that the department obtains any
necessary federal approvals, and that federal financial participation is available and not otherwise jeopardized.
