Bill Text: CA AB2266 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Medi-Cal: Health Homes for Medi-Cal Enrollees and 1115

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed - Dead) 2012-08-29 - Ordered to inactive file at the request of Senator Alquist. [AB2266 Detail]

Download: California-2011-AB2266-Amended.html

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BILL NUMBER: AB 2266	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 21, 2012
	AMENDED IN SENATE  JUNE 25, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  APRIL 17, 2012
	AMENDED IN ASSEMBLY  MARCH 20, 2012

INTRODUCED BY   Assembly Member Mitchell
   (Principal coauthor: Assembly Member Atkins)
   (Coauthors: Assembly Members Wieckowski and Williams)

                        FEBRUARY 24, 2012

   An act to add Article 3.9 (commencing with Section 14127) to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, relating to Medi-Cal.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2266, as amended, Mitchell. Medi-Cal:  Enhanced Health
Homes for Frequent Hospital Users with Chronic Conditions. 
 Health Homes for Medi-Cal Enrollees and 1115 Waiver
Demonstration Populations with Chronic and Complex Conditions. 
   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 authorizes a state,
subject to federal approval of a state plan amendment, to offer
health home services, as defined, to eligible individuals with
chronic conditions. 
   This bill would require the department, upon approval of a state
plan amendment and subject to the availability of specified funding,
to establish a program to provide health home services to frequent
hospital users, as prescribed. If federal matching funds are
available, this bill would require the department to prepare, or
contract for the preparation of, an evaluation of the program, and to
complete the evaluation and submit a report to the appropriate
policy and fiscal committees of the Legislature within 18 months
after designated providers have been selected and have begun to seek
payment.  
   This bill would authorize the department, subject to federal
approval, to create a health home program for enrollees with chronic
conditions, as prescribed, as authorized under federal law. If the
department exercises its authority to create a health home program
for enrollees with chronic conditions, this bill would require the
department to, subject to federal approval, also create an enhanced
health home program for enrollees with complex conditions, as
prescribed. This bill would require the department to ensure that an
evaluation of the program is completed, if created by the department,
and would require that the department submit a report to the
appropriate policy and fiscal committees of the Legislature within 2
years after implementation of the program. 
   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.  The Legislature finds and declares all of the
following:
   (a) The Health Homes for Enrollees with Chronic Conditions option
(Health Homes option) under Section 2703 of the federal Patient
Protection and Affordable Care Act (Affordable Care Act) (42 U.S.C.
Sec. 1396w-4) offers an opportunity for California to address complex
 , co-occurring,   and  chronic  ,
and disabling  health conditions, as well as social
determinants of poor health outcomes and high costs among Medi-Cal
beneficiaries. 
   (b) Almost half of the people who frequently use the emergency
department for reasons that could have been avoided with earlier or
primary care are homeless. People who are chronically homeless are
vulnerable to frequent hospitalization. Frequent users who are
homeless face significant difficulties accessing regular or
preventive care and complying with treatment protocols, having no
place to store medications, an inability to adhere to a healthy diet
or maintain appropriate hygiene, frequent victimization, and a lack
of rest to recover from illness. Homeless Medi-Cal enrollees will, in
fact, continue to use costly acute care services and actually
increase their inpatient days, even if receiving medical home
services to reduce their return to the hospital.  
   (b) For example, people who frequently use hospitals for reasons
that could have been avoided with more appropriate care incur high
Medi-Cal costs and suffer poor health outcomes due to the complexity
of their conditions and, often, their negative social determinants of
health. Frequent users have difficulties accessing regular or
preventive care and complying with treatment protocols, and the
significant number who are homeless have no place to store
medications, cannot adhere to a healthy diet or maintain appropriate
hygiene, face frequent victimization, and lack rest when recovering
from illness. 
   (c) Increasingly, health providers are partnering with community
behavioral health  ,   and  social services
 , and housing  providers to offer a
person-centered interdisciplinary system of care that 
includes intensive paraprofessional care coordination or case
management, often in supportive housing. Programs that offer
intensive and comprehensive care coordination to frequent hospital
users integrate primary care, behavioral health care, and social
services, and facilitate coordination of care among health systems,
making this model an ideal health home that fosters a "whole person"
orientation   effectively addresses the needs of
enrollees with multiple chronic or complex conditions, including
frequent hospital users and people experiencing chronic homelessness.
These health homes help people with chronic and complex conditions
to access better care and better health, while decreasing costs 
. 
   (d) Data show that programs providing intensive case management
and care coordination, including connecting to and sustaining people
in housing, decrease Medicaid costs within a year by reducing
avoidable emergency department visits, hospital admissions, and
readmissions. A randomized study of chronically homeless frequent
users receiving intensive case management in housing demonstrated
decreases in hospital admission rates of 46 percent, hospital days of
46 percent, and emergency department visits of 36 percent after 18
months of intervention, compared to a control group receiving usual
care. Medi-Cal beneficiaries participating in foundation-funded
frequent user programs experienced reductions in Medi-Cal costs of
three thousand eight hundred forty-one dollars ($3,841) per
beneficiary after one year and seven thousand five hundred nineteen
dollars ($7,519) per beneficiary per year after two years, while
drastically improving clinical outcomes.  
   (e) Additionally, the Massachusetts Office of Medicaid, as another
example, reported that its Medicaid Program offering intensive
interdisciplinary services and connecting chronically homeless
individuals to housing reduced Medicaid costs by 67 percent for a
total cost decrease of nine thousand eight hundred ten dollars
($9,810) per resident, even when considering the costs of housing.
 
   (f) 
    (d)  Federal guidelines allow the state to access
enhanced federal matching rates under the Health Homes option for
multiple target populations to achieve more than one policy goal.
  SEC. 2.  Article 3.9 (commencing with Section 14127) is added to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

      Article 3.9.   Enhanced Health Homes for Frequent
Hospital Users with Chronic Conditions   Health Homes
for Medi-Cal Enrollees and 1115 Waiver Demonstration Populations with
Chronic and Complex Conditions 


   14127.  For the purposes of this article, the following
definitions shall apply:
   (a) "Department" means the State Department of Health Care
Services.
   (b) "Eligible individual" means an individual who meets the
criteria defined by the department  . "Individual eligible for
enhanced health home services" means an individual who meets the
criteria defined by the department,  consistent with subdivision
(c) of Section  14127.1 for eligibility for enhanced health
home services identified in subdivision (d) of Section 
14127.2.
   (c)  (1)    "Enhanced health home" means a
 designated  provider  , such as a
physician, clinical practice or clinical group practice, rural health
clinic, community health center, community mental health center,
home health agency, or any other entity or provider, operating or
proposing to operate in coordination with a team of health care
professionals, such as physicians, nurse care coordinators,
nutritionists, social workers, behavioral health professionals, and
paraprofessionals,   so designated by the department
 that satisfies all of the following: 
   (1) 
    (A)  Meets the criteria described in federal guidelines.

   (2) 
    (B)  Offers a whole person approach  , such as, but
not limited to, coordinating se   rvices for all of the
needs affecting the health of an individual eligible for enhanced
health home services  . 
   (3) Coordinates or proposes to coordinate services for all of the
needs of eligible individuals.  
   (4) 
    (C)  Elects to participate in the program pursuant to
this article. 
   (5) 
    (D)  Offers services in a range of settings  ,
including the eligible individual's home   as
appropriate to meet the needs of an individual eligible for enhanced
health home services  . 
   (2) An enhanced health home includes a lead provider that is a
community clinic, a mental health plan, or a hospital, and may
include a physician, clinical practice or clinical group practice,
rural health clinic, community health center, community mental health
center, home health agency, nurse care coordinators, nutritionists,
social workers, behavioral health professionals, and
paraprofessionals, or any other entity or provider. 
   (d) "Federal guidelines" means all federal statutory guidance, and
all regulatory and policy guidelines issued by the federal Centers
for Medicare and Medicaid Services regarding the Health Homes for
Enrollees with Chronic Conditions option under Section 2703 of the
federal Patient Protection and Affordable Care Act  (Affordable
Care Act)  (42 U.S.C. Sec. 1396w-4), including the State
Medicaid Director Letter issued on November 16, 2010. 
   (e) "Health home" means a provider or team of providers the
department designates that meets federal guidelines as a health home.
The department may determine the model of health home it intends to
create, including any entity, provider, or group of providers
operating as a health team, as a team of health care professionals,
or as a designated provider, as those terms are defined in Sections
3502(c)(2) and 1945(h)(5) and (h)(6) of the Affordable Care Act,
respectively.  
   (e) 
    (f)  "Homeless" has the same meaning as that term is
defined in Section 91.5 of Title 24 of the Code of Federal
Regulations. "Chronic homelessness" means the state of an
adult   individual  whose conditions limit his or
her activities of daily living and who has experienced homelessness
for longer than a year or for four or more episodes over three years.

   14127.1.  (a) No later than January 1, 2014, the department shall
do all of the following:  
   14127.1.  Health homes for enrollees with chronic conditions.
Subject to federal approval, the department may do all of the
following to create a health home program, as authorized under
Section 2703 of the Affordable Care Act:
   (a) Design, with opportunity for public comment, a program to
provide health home services to Medi-Cal beneficiaries and Section
1115 waiver demonstration populations with chronic conditions.
   (b) Contract with new providers, new managed care plans, existing
Medi-Cal providers, existing managed care plans, or counties to
provide health home services, as provided in Section 14128.
   (c) Submit any necessary applications to the federal Centers for
Medicare and Medicaid Services for a state plan amendment and Section
1115 waiver demonstration amendment to provide health home services
to Medi-Cal beneficiaries, to newly eligible Medi-Cal beneficiaries
upon Medicaid expansion under the Affordable Care Act, and, if
applicable, to Low Income Health Program (LIHP) enrollees in counties
with LIHPs willing to match federal funds.
   (d) Define the populations of eligible individuals.
   (e) Develop a payment methodology, including, but not limited to,
fee-for-service or per member, per month payment structures.
   (f) Identify health home services, consistent with federal
guidelines. 
    14127.2.    Enhanced health homes for enrollees with
complex conditions. If the department creates a health home program
pursuant to Section 14127.1, it shall include an enhanced health home
program, subject to federal approval under Section 2703 of the
Affordable Care Act.  
   (a) In creating an enhanced health home program, the department
shall do all of the following: 
   (1) Design, with opportunity for public comment, a program to
provide enhanced health home services  identified in subdivision
(g)  to persons at high risk of avoidable and frequent use of
hospital services due to complex co-occurring health and behavioral
health conditions. 
   (2) Upon a request for proposals process, select providers in
accordance with subdivision (e) of Section 14127.2, as designated
providers working in coordination with health care providers under
the Health Homes option state plan amendment.  
   (2) Contract with new and existing providers, new and existing
managed care plans, or counties in accordance with the selection
criteria identified in subdivision (h), as designated enhanced health
homes. 
   (3)  Submit any necessary applications  
Include an enhanced health home program in an application  to
the federal Centers for Medicare and Medicaid Services for a state
plan amendment under the Health Homes option to provide enhanced
health home services  to Medi-Cal beneficiaries, to newly
eligible Medi-Cal beneficiaries upon Medicaid expansion under the
Affordable Care Act, and to Low Income Health Program (LIHP)
enrollees, if applicable, in counties with LIHPs willing to match
federal funds  .
   (b) The program established pursuant to this  article
  section  shall provide services to Medi-Cal
beneficiaries, to newly enrolled Medi-Cal beneficiaries upon
implementation of Medicaid expansion under the Affordable Care Act,
and, if applicable, in counties with a LIHP  established
under California's Bridge to Reform Section 1115(a) Medicaid
Demonstration implemented on November 1, 2010,  willing to
match federal funds, to enrollees of the LIHP.  The program
established pursuant to this article shall be designed to reduce a
participating individual's avoidable use of hospitals when more
effective care, including primary and specialty care, and social
services, can be provided in less costly settings.  

   (c) The department shall seek, to the extent permitted by federal
law and to the extent federal approval is obtained, to define the
population of eligible individuals experiencing both of the
following: 
   (c) Designated enhanced health home providers shall determine
whether an individual is eligible for enhanced health home services.
An individual is eligible for enhanced health home services if the
individual is a Medi-Cal beneficiary or, if applicable, a LIHP
beneficiary who meets both of the following criteria: 
   (1) Two or more of the following current diagnoses:
   (A) Mental health disorders identified by the department as
prevalent among frequent hospital users.
   (B) Substance abuse or substance dependence disorders.
   (C) Chronic or life-threatening medical conditions identified by
the department as prevalent among frequent hospital users.
   (D) Significant cognitive impairments associated with traumatic
brain injury, dementia, or other causes.
   (2) Two or more of the following indicators of severity:
   (A) Frequent inpatient hospital admissions, including long-term
hospitalization for medical, psychiatric, or substance abuse related
conditions.
   (B) Excessive use of crisis or emergency services or inpatient
hospital care with failed linkages to primary care or behavioral
health care.
   (C) Chronic homelessness.
   (D) History of inadequate followthrough, related to risk factors,
with elements of a treatment plan, including lack of followthrough in
taking medications, following a crisis plan, or achieving stable
housing.
   (E) Two or more episodes of use of detoxification services.
   (F) Medication resistance due to intolerable side effects, or
illness interfering with consistent self-management of medications.
   (G) Self-harm or threats of harm to others.
   (H) Evidence of significant complications in health conditions.

   (d) The department may establish other criteria to allow
additional Medi-Cal or LIHP beneficiaries to be eligible for enhanced
health home services.  
   (e) This section shall not be construed to permit providers to
determine whether an individual is eligible for Medi-Cal or LIHP.
 
   (f) The department may develop a payment methodology other than a
fee-for-service payment, including, but not limited to, a per member,
per month payment to designated providers.  
   (g) (1) Subject to federal approval for receipt of the enhanced
federal match, services provided under the program established
pursuant to this section shall include all of the following: 

   (A) Comprehensive and individualized case management.  
   (B) Care coordination and health promotion, including connection
to medical, mental health, and substance abuse care.  
   (C) Comprehensive transitional care from inpatient to other
settings, including appropriate followup.  
   (D) Individual and family support, including authorized
representatives.  
   (E) If relevant, referral to other community and social services
supports, including transportation to appointments needed to manage
health needs, connection to housing for participants who are homeless
or unstably housed, and peer and recovery support.  
   (F) Health information technology to identify eligible individuals
and link services, if feasible and appropriate.  
   (2) Beneficiaries may require less intensive services or graduate
completely from the program upon stabilization.  
   (h) For purposes of implementing this section, the department
shall ensure that designated providers, managed care organizations
subcontracting with providers, or counties subcontracting with
providers offer all of the following:  
   (1) A designated lead provider that is a community clinic, a
mental health plan pursuant to Section 14712, or a hospital. 

   (2) Demonstrated experience working with frequent hospital users,
with documentation of experience reducing emergency department visits
and hospital inpatient days among the population served.  
   (3) Demonstrated experience working with people experiencing
chronic homelessness.  
   (4) The capacity and administrative infrastructure to participate
in the program, including the ability to meet requirements of federal
guidelines.  
   (5) Documented ability to provide or to link clients with
appropriate community-based services, including intensive
individualized face-to-face care coordination, primary care,
specialty care, mental health treatment, substance abuse treatment,
peer and recovery support, permanent or transitional housing, and
transportation.  
   (6) Experience working with supportive or other permanent housing
providers.  
   (7) Current partnership with essential community hospitals. 

   (8) A viable plan, with roles identified among providers of the
enhanced health home, to do all of the following:  
   (A) Reach out to and engage frequent hospital users and
chronically homeless eligible individuals.  
   (B) Connect eligible individuals who are homeless or experiencing
housing instability to permanent housing, including supportive
housing.  
   (C) Ensure eligible individuals receive integrated services needed
to access and maintain health stability.  
   (D) Track, maintain, and provide outcome data as required by the
department for purposes of the evaluation required pursuant to
Section 14127.4.  
   (E) Identify appropriate funding sources for the nonfederal share
of costs of services for the first eight quarters of implementation
of the program.  
   (F) Identify appropriate funding sources for the nonfederal share
of costs of services to sustain program funding beyond the first
eight quarters of implementation of the program. Identifying sources
may include a plan to partner with managed care organizations,
counties, hospitals, private funders, or others.  
   14127.2.  (a) In accordance with federal guidelines, the state may
limit the availability of services geographically, provided that
providers meet criteria identified in subdivision (e) in each county
designated.
   (b) The department may designate providers working under a managed
care organization contract or as a fee-for-service provider.
   (c) The department may develop a payment methodology other than a
fee-for-service payment, including a per member, per month payment to
designated providers.
   (d) (1) Subject to federal approval for receipt of the enhanced
federal match, services provided under the program established
pursuant to this article shall include all of the following:
   (A) Comprehensive and individualized case management.
   (B) Care coordination and health promotion, including connection
to medical, mental health, and substance abuse care.
   (C) Comprehensive transitional care from inpatient to other
settings, including appropriate followup.
   (D) Individual and family support, including authorized
representatives.
   (E) If relevant, referral to other community and social services
supports, including transportation to appointments needed to manage
health needs, connection to housing for participants who are homeless
or unstably housed, and peer and recovery support.
   (F) Health information technology to identify eligible individuals
and link services, if feasible and appropriate.
   (2) Beneficiaries may require less intensive services or graduate
completely from the program upon stabilization.
   (e) The department shall select designated providers operating
with a team of health care professionals that have all of the
following:
   (1) A designated lead provider that is a community clinic, a
provider of mental health services pursuant to the Adult and Older
Adult Mental Health System of Care Act (Part 3 (commencing with
Section 5800) of Division 5), or a hospital.
   (2) Demonstrated experience working with frequent hospital users,
with documentation of experience reducing emergency department visits
and hospital inpatient days among the population served.
   (3) Demonstrated experience working with people experiencing
chronic homelessness.
   (4) The capacity and administrative infrastructure to participate
in the program, including the ability to meet requirements of federal
guidelines.
   (5) Documented ability to provide or to link clients with
appropriate community-based services, including intensive
individualized face-to-face care coordination, primary care,
specialty care, mental health treatment, substance abuse treatment,
peer and recovery support, permanent or transitional housing, and
transportation.
   (6) Experience working with supportive or other permanent housing
providers.
   (7) Current partnership with essential community hospitals,
particularly the hospital or hospitals serving a high proportion of
Medi-Cal patients, such as disproportionate share hospitals.
   (8) A viable plan, with roles identified among providers of the
enhanced health home, to do all of the following:
   (A) Reach out to and engage frequent hospital users and
chronically homeless eligible individuals.
   (B) Connect eligible individuals who are homeless or experiencing
housing instability to permanent housing, including supportive
housing.
   (C) Ensure eligible individuals receive whatever integrated
services are needed to access and maintain health stability,
including medical, mental health, and substance abuse care and social
services to address social determinants of health.
   (D) Track, maintain, and provide outcome data to the evaluator
described in Section 14127.4.
   (E) Identify appropriate funding sources for the nonfederal share
of costs of services for the first eight quarters of implementation
of the program.
   (F) Identify appropriate funding sources for the nonfederal share
of costs of services to sustain program funding beyond the first
eight quarters of implementation of the program. Identifying sources
may include a plan to partner with managed care organizations,
counties, hospitals, private funders, or others. 
   14127.3.  (a)  The department shall administer this article in
a manner that attempts to maximize federal financial participation,
consistent with federal law. 
    (b)    This article shall not be construed to
preclude local governments  , health plans, or
foundations from contributing the nonfederal share of costs for
services provided under this program.  The   department
may also enter into risk-sharing and social impact bond program
agreements to fund services under this article.  
   (b) This article shall not be construed to limit the department in
targeting additional populations or creating additional programs
under the Health Homes option.  
   (c) 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 this article through provider bulletins or
similar instructions, without taking regulatory action. 

   (c) In accordance with federal guidelines, the state may limit
availability of health home or enhanced health home services
geographically. 
   14127.4.  (a) If  federal matching funds are available,
  the department implements a health home or enhanced
health home program,  the department shall  prepare, or
contract for the preparation of,   ensure that  an
evaluation of the program identified in this article  . The
department shall seek out and utilize only nonstate public funds or
private funds to fund the nonfederal share of costs of the
evaluation. The department, within 18 months after designated
providers have been selected and have begun to seek payment, shall
complete the evaluation and   is completed and shall,
within two years after implementation,  submit a report to the
appropriate policy and fiscal committees of the Legislature.
   (b) The requirement for submitting the report imposed under
subdivision (a) is inoperative four years after the date the report
is due, pursuant to Section 10231.5 of the Government Code.
   14127.5.  (a) This article shall be implemented only if federal
financial participation is available and the federal Centers for
Medicare and Medicaid Services approves the state plan amendment
sought pursuant to  subdivision (a) of Section 14127.1
  this article, and the department expects the programs
to be cost neutral to the state  .
                                                          (b) Except
as provided in subdivision (c), this article shall be implemented
only if nonstate public funds or private funds are available to fully
fund the  creation, implementation,  administration
 ,  and service costs during the first eight
quarters of implementation, and thereafter.
   (c) Notwithstanding subdivision (b), if the department finds,
after the first eight quarters of implementation, that Medi-Cal costs
avoided by the participants of the  enhanced health home 
program are adequate to fully fund the program costs, the department
may use state funds to fund the program costs.
   (d) The department may revise or terminate the enhanced health
home program any time after the first eight quarters of
implementation if the department finds that the program fails to
result in improved health outcomes or  fails to decrease
total Medi-Cal costs, including managed care organization costs, if
applicable, for the population it is serving. The department may also
designate additional providers, with federal approval, or may remove
providers operating under the program if those providers are unable
to provide the nonfederal matching funds or do not meet the
department's guidelines   results in substantial General
Fund expense without commensurate decreases in Medi-Cal costs among
program participants  . 
   14128.  (a) In the event of a judicial challenge of the provisions
of this article, this article shall not be construed to create an
obligation on the part of the state to fund any payment from state
funds due to the absence or shortfall of federal funding.
   (b) For the purposes of implementing this article, the department
shall establish and use a competitive process to select or amend
existing contracts to provide or arrange for services under this
article. Contracts may be statewide or on a more limited geographic
basis. Contracts entered into or amended under 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 the Government Code, and shall be exempt from the review or
approval of any division of the Department of General Services.
   (c) (1) 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 article
by means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions, without taking regulatory action,
until such time as regulations are adopted. It is the intent of the
Legislature that the department is allowed temporary authority as
necessary to implement program changes until completion of the
regulatory process.
   (2) The department shall adopt emergency regulations no later than
two years after implementation of this article. The department may
readopt, up to two times, any emergency regulation authorized by this
section that is the same as or substantially equivalent to an
emergency regulation previously adopted pursuant to this section.
   (3) The adoption of emergency regulations implementing this
article authorized by this subdivision shall be deemed an emergency
and necessary for the immediate preservation of the public peace,
health, safety, or general welfare. Emergency regulations authorized
by this section shall be exempt from review by the Office of
Administrative Law. The emergency regulations authorized by this
section shall be submitted to the Office of Administrative Law for
filing with the Secretary of State and shall remain in effect for no
more than 180 days, by which time final regulations may be adopted.