BILL NUMBER: SB 147 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 8, 2015
AMENDED IN SENATE APRIL 21, 2015
AMENDED IN SENATE APRIL 7, 2015
INTRODUCED BY Senator Hernandez
JANUARY 28, 2015
An act to add Article 4.1 (commencing with Section 14138.1) to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
SB 147, as amended, Hernandez. Federally qualified health centers.
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 law provides that federally
qualified health center (FQHC) services, as described, are covered
benefits under the Medi-Cal program, to be reimbursed, to the extent
that federal financial participation is obtained, to providers on a
per-visit basis. "Visit" is defined as a face-to-face encounter
between a patient of an FQHC and specified health care professionals.
Existing federal law authorizes a state plan to provide for payment
in any fiscal year to an FQHC for specified services in an amount
that is determined under an alternative payment methodology (APM) if
it is agreed to by the state and the FQHC and results in a payment to
the FQHC of an amount that is at least equal to the amount otherwise
required to be paid to the FQHC.
This bill would require the department to authorize a
3-year an APM pilot project, to commence no
sooner than July 1, 2016, for FQHCs that agree to participate.
The bill would require the department to authorize implementation of
an APM pilot project with respect to a county for a period of up to
3 years. The bill would require the department to
determine an APM supplemental capitation amount for each APM aid
category to be paid by the department to each principle
principal health plan that contains at least one
participating FQHC in its provider network, as specified.
Under the APM pilot project, participating FQHCs would receive a per
member per month wrap-cap payment for each of its APM enrollees, as
specified. The bill would require each principal health plan to pay a
participating FQHC that is in the plan provider network the wrap-cap
amounts, as determined, for each APM enrollee of that FQHC.
The bill would require, except as specified, that an
evaluation of the APM pilot project be completed by an independent
entity within 6 months of the conclusion of the APM pilot project,
and would require the independent entity to report the findings to
the department and the Legislature.
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. Article 4.1 (commencing with Section 14138.1) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:
Article 4.1. Payment Reform Pilot Program for Federally
Qualified Health Centers
14138.1. For purposes of this article, the following definitions
apply:
(a) "Alternative payment methodology" (APM) has the same meaning
as specified in Section 1396a(bb)(6) of Title 42 of the United States
Code.
(b) "APM aid category" means a Medi-Cal category of aid designated
by the department. For all its APM enrollees in an APM aid category,
a participating FQHC site shall receive compensation as described
under the APM pilot project. The APM aid categories may include, but
are not limited to, all of the following categories of aid:
(1) Adults.
(2) Children.
(3) Seniors and persons with disabilities.
(4) The adult expansion population eligible pursuant to Section
14005.60. 14005.60, to the extent the
department determines, in consultation with health plans and
interested FQHCs, that sufficient data is available to allow for
inclusion of this population in the APM pilot project. This paragraph
shall not be construed to prohibit inclusion of the adult expansion
population in the APM pilot project on a date subsequent to initial
authorization pursuant to subdivision (a) of Section
14138.12.
(c) "APM enrollee" means a member who is assigned by a principal
health plan or secondary subcontracting
payer to a participating FQHC for primary care services and who is
within one of the designated APM aid categories.
(d) "APM enrollee true-up" means the process by which payments are
adjusted to reflect changes in the number of APM enrollees, by APM
aid category, for participating FQHCs.
(e)
( d) "APM pilot project" means the pilot
project authorized by this article.
(f)
(e) "APM scope of services" means the scope of services
for a participating FQHC for which its per-visit rate was determined
pursuant to Section 14132.100.
(g)
(f) "APM supplemental capitation" means an additional,
APM aid category-specific, PMPM amount that is paid by the department
to a principal health plan having one or more participating FQHCs in
its provider network.
(h) "Base payment" means the amount paid by a principal health
plan and any secondary payer, as applicable, to an FQHC for patient
services in the APM scope of services with respect to APM enrollees
of the FQHC pursuant to its contract, exclusive of any incentive
payments. Base payments do not include traditional wrap-around
payments or wrap-cap payment amounts.
(g) "Clinic-specific PMPM" means the monthly, per assigned member,
capitated amount the principal health plan or subcontracting payer
is required to pay to the participating FQHC for the APM scope of
services. The clinic-specific PMPM is exclusive of any incentive
payments and shall be developed to reflect the amount the
participating FQHC would have received under the prospective payment
system methodology set forth in Section 14132.100.
(i)
( h) "FQHC" means any community or public
"federally qualified health center," as defined in Section 1396d(l)
(2)(B) of Title 42 of the United States Code and providing services
as defined in Section 1396d(a)(2)(C) of Title 42 of the United States
Code.
(j)
(i) "Member" means a Medi-Cal beneficiary who is
enrolled with a principal health plan or secondary
subcontracting payer.
(k)
(j) "Participating FQHC" means a
an FQHC participating in the APM pilot project at one or
more of the FQHC's sites. "Participating FQHC" also refers to a
FQHC's site that is participating in the APM pilot project.
(l)
(k) "PMPM" and "per member per month" both mean a
monthly payment made for providing or arranging health care services
for a member and may refer to a payment by the department to a
principal health plan, or by a principal health plan to a
secondary subcontracting payer, or by a
principal health plan or secondary
subcontracting payer to an FQHC, or from and to other entities
as specified in this article.
(m)
(l) "Principal health plan" means an organization or
entity that enters into a contract with the department pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.8
(commencing with Section 14087.5), Article 2.81 (commencing with
Section 14087.96), Article 2.82 (commencing with Section 14087.98),
Article 2.91 (commencing with Section 14089), or Chapter 8
(commencing with Section 14200), to provide or arrange for the care
of Medi-Cal beneficiaries within a county in which the APM pilot
project is implemented.
(n) "Secondary
(m) "Subcontracting payer" means
an organization or entity that subcontracts with a principal health
plan to provide or arrange for the care of its members and contains
one or more participating FQHCs in its provider network.
(n) "Traditional encounter" means a face-to-face encounter that is
recognized as a billable visit, as described in subdivision (g) of
Section 14132.100.
(o) "Traditional wrap-around payment" means the supplemental
payments payable to an FQHC in the absence of the APM pilot project
with respect to services provided to Medi-Cal managed care enrollees,
which are made by the department pursuant to subdivision (e) of
Section 14087.325 and subdivision (h) of Section 14132.100.
(p) "Wrap-cap" means a prospective PMPM amount that is determined
by APM aid category for each participating FQHC site, and is paid
monthly by a principal health plan or secondary payer to the
participating FQHC with respect to its APM enrollees in each APM aid
category in lieu of a traditional wraparound payment.
14138.10. The Legislature finds and declares all of the
following:
(a) The federal Patient Protection and Affordable Care
Act has made and continues to make significant progress in driving
health care delivery system reforms that emphasize health outcomes,
efficiency, patient satisfaction
satisfaction, and value.
(b) California has expanded Medi-Cal to cover more than 12 million
residents, roughly one-third of the state's population. To meet the
needs of the state's growing patient population, California must
continue to explore new strategies to expand access to high quality
and cost-effective primary care services.
(c) With such a large portion of the state's population receiving
health care services through Medi-Cal, it is imperative that
patient-centered innovations drive Medi-Cal reforms.
(d) Health care today is more than a face-to-face visit with a
provider, but rather a whole-person approach, often including a
physician, a care team of other health care providers, technology
inside and outside of a health center, and wellness activities
including nutrition and exercise classes, all of which are designed
to be more easily incorporated into a patient's daily life.
(e) Accessible health care in a manner that fits a patient's needs
is important for improving patient satisfaction, building trust, and
ultimately improving health outcomes.
(f) In an attempt to invest up front in health care services that
can prevent longer term avoidable high-cost services, the
federal Patient Protection and Affordable Care Act made a
significant investment in FQHCs.
(g) FQHCs are essential community providers, providing high
quality, cost-effective comprehensive primary care services to
underserved communities.
(h) Today FQHCs face restrictions, however,
certain restrictions because the current payment structure
reimburses an FQHC only when there is a face-to-face visit
traditional encounter with a provider. Current
law prohibits payment for both a primary care visit and
mental health visit on the same day, a restriction that
inhibits coordination and efficiency. day.
(i) A more practical approach financially incentivizes FQHCs to
provide the right care at the right time. Restructuring the current
visit based, fee-for-service model with a capitated equivalent
affords FQHCs the assurance of payment and the flexibility to deliver
care in the most appropriate patient-centered manner.
(j) A reformed payment methodology will enable FQHCs to take
advantage of alternative touches. Alternative touches, such
as encounters. Alternative encounters, such as group
visits, same-day mental health services and phone
telephone and email consultations, are effective
care delivery methods and contribute to a patient's overall health
and well-being.
14138.11. It is the intent of the Legislature to test an
alternative payment methodology for FQHCs, as permitted by federal
law, and to design and implement the APM to do all of the following:
(a) Provide patient-centered care delivery options to California's
expansive Medi-Cal population.
(b) Promote cost efficiencies, and improve population health and
patient satisfaction.
(c) Improve the capacity of FQHCs to deliver high-quality care to
a population growing in numbers and in complexity of needs.
(d) Transition away from a payment system that rewards volume with
a flexible alternative that recognizes the value added when Medi-Cal
beneficiaries are able to more easily access the care they need and
when providers are able to deliver care in the most appropriate
manner to patients.
(e) Track alternative touches encounters
at FQHCs in order to establish a data set from which
alternative touches encounters may be
assigned a value that can be used in future ratesetting.
(f) Implement the APM where the FQHC receives at least the same
amount of funding it would receive under the current payment system,
and in a manner that does not disrupt patient care or threaten FQHC
viability.
14138.12. (a) (1) The department shall
authorize a three-year payment reform pilot
project for FQHCs using an APM in accordance with this article.
Implementation
(2) Implementation of the APM
pilot project shall begin no sooner than July 1, 2016, subject to
any necessary federal approval.
approvals.
(3) The department shall authorize implementation of an APM pilot
project with respect to a county for a period of up to three years.
(4) At least 90 days prior to implementation of an APM pilot
project for a participating FQHC site in a county, the department
shall notify a principal health plan in writing of the principal
health plan's specific APM supplemental capitation rate and
clinic-specific PMPM rates for the participating FQHC in the county.
The notification from the department to the principal health plan
shall be based on the rates submitted by the department for final
approval. If the APM supplemental capitation rates or clinic-specific
PMPM rates are modified after the notification to a principal health
plan, the department shall notify a principal health plan of the
revised rates and, if either the principal health plan or
participating FQHC requests, adjust the implementation date of the
APM pilot project for a participating FQHC in a county so that it
occurs at least 90 days after the revised rate notification.
(5) The APM pilot project for a participating FQHC site in a
county shall begin no sooner than the first day of the month
following the month in which the department received federal approval
of the rates.
(b) The APM pilot project shall comply with federal APM
requirements and the department shall file a state plan amendment
and seek any federal approvals as necessary for the
implementation of this article. Nothing in this
article shall be construed to authorize the department to seek
federal approval to affirmatively waive Section 1396a(bb)(6) of Title
42 of the United States Code.
(c) Nothing in this article shall be construed to limit or
eliminate services provided by FQHCs as covered benefits in the
Medi-Cal program.
14138.13. (a) To implement this article, the
The department shall notify every FQHC in the state
of the APM pilot project and shall invite any interested FQHC
to notify the department that the FQHC agrees to participate
apply for participation in the APM with respect
to one or more of the FQHC's sites. Consistent with federal law, the
state plan amendment described in subdivision (b) of Section
14138.12 shall specify that the department and each
participating FQHCs agree FQHC voluntarily
agrees to the APM.
(b) (1) (A) The department shall develop the following, in
consultation with interested FQHCs and principal health plans and
consistent with federal law:
(B) The selection process that interested FQHCs may apply for
participation in the pilot project, which shall include, but need not
be limited to, the following:
(i) The FQHC has the demonstrated ability to collect and submit
encounter data in a form and manner that satisfies department
requirements.
(ii) The FQHC is in good standing with the relevant state and
federal regulators.
(iii) The FQHC has the financial and administrative capacity to
undertake payment reform.
(2) In accordance with the process and criteria developed pursuant
to paragraph (1), the department shall approve or deny an interested
FQHC site application for participation in the pilot project. The
department may limit the number of participating FQHCs in the pilot
project and the number of counties in which the pilot project will
operate.
(3) All principal health plans and applicable subcontracting
payers are required to participate in the APM pilot project pursuant
to this article to the extent that one or more contracted FQHC sites
located in the plan's county are selected to participate in the pilot
project.
(b)
( c) The APM shall be applied only with
respect to a participating FQHC for services the FQHC provides to its
APM enrollees that are within its APM scope of services.
(c)
( d) Payment to the participating FQHC shall
continue to be governed by the provisions of Sections 14132.100 and
14087.325 for services provided with respect to both of the following
categories of patients:
(1) A Medi-Cal beneficiary who receives services from any FQHC to
which the beneficiary is not assigned for primary care services under
the APM pilot project by a principal health plan or
secondary subcontracting payer.
(2) A person who is a Medi-Cal beneficiary, but who is not a
Medi-Cal beneficiary within a designated APM aid category.
(d)
(e) (1) A participating FQHC, with respect to one or
more sites of its choosing, may opt to discontinue its participation
in the pilot project subject to a notice requirement of no less than
30 days and no greater than 45 days, as established by the
department. 120 days.
(2) A principal health plan may opt to discontinue its
participation in the pilot project, subject to a notice requirement
of no less than 30 days and no greater than 45 days, as
established by the department, if subdivision (f) of Section 14138.14
120 days if Section 14138.16 is amended at any
time while the pilot project is in effect. The department shall place
a provision in a plan's contract giving the plan the ability to
discontinue its participation in the APM pilot project pursuant to
this paragraph.
14138.14. (a) A participating FQHC shall be compensated for the
APM scope of services provided to its APM enrollees pursuant to this
section.
(b) (1) A participating FQHC shall, in addition to its base
payment, and any applicable incentive payment, receive a PMPM
wrap-cap payment for each of its APM enrollees as described in
subdivision (c). The department shall determine the wrap-cap amount
specific to each participating FQHC, and for each APM aid category.
For this purpose, the department shall, in consultation with each
participating FQHC and health plan, use the best available data for a
recent agreed-upon time period that reflects the audit and
reconciliation payment adjustments for the participating FQHC, which
may be composite data from different or multiple periods. The
determinations shall, at a minimum, take into account the following
factors:
(A) An estimation of the amount of traditional wrap-around
payments that would have been paid to the participating FQHC with
respect to APM enrollees for the APM scope of services in the absence
of the APM pilot project. For each APM aid category, the estimation
shall be no less than the participating FQHC's historical utilization
for assigned members for a 12-month period reflected in the data
being used, multiplied by its prospective payment system rate, as
determined pursuant to Section 14132.100, less any payments for the
APM scope of services, exclusive of incentive payments, that were
received from principal health plans and any secondary payers for the
relevant period for assigned members, and shall be calculated on a
PMPM basis.
(B) An estimation of service utilization for each APM aid category
in the absence of the APM pilot project, including estimates of the
utilization of services to be provided, and utilization and types of
services not previously provided, reflected or identifiable in the
prior period data.
(2) The wrap-cap payments shall not be decreased for the first
three years of the APM pilot project, unless agreed to by the
department and the applicable participating FQHC.
(c) Notwithstanding any other law, each principal health plan
shall pay a participating FQHC that is in the plan provider network
the wrap-cap amounts determined in subdivision (b) for each APM
enrollee of that FQHC, or, in cases where a secondary payer is
involved, provide the necessary amounts to the secondary payer and
require that secondary payer to make the required wrap-cap payments
to the FQHC. The principal health plan, secondary payer, as
applicable, and the participating FQHC may choose the manner in which
the wrap-cap payments are made, provided the resulting payment is
equal to the full amount of the wrap-cap payments to which the
participating FQHC is entitled, taking into account, among others,
changes in the number of APM enrollees within the APM aid categories.
In cases where a secondary payer is involved, the principal health
plan shall demonstrate and certify to the department that it has
contracts or other arrangements in place that provide for meeting the
requirements herein and to the extent that the secondary payer fails
to comply with the applicable requirements in this article, the
principal health plan shall then be responsible to ensure the
participating FQHC receives all payments due under this article in a
timely manner.
(d) The department shall adjust the amounts in subdivision (b) at
least annually for any change to the prospective payment system rate
for participating FQHCs, including changes resulting from a change in
the Medicare Economic Index pursuant to subdivision (d) of Section
14132.100, and any changes in the FQHC's scope of services pursuant
to subdivision (e) of Section 14132.100.
(e) An FQHC site participating in the APM pilot project shall not
receive traditional wrap-around payments pursuant to Sections
14132.100 and 14087.325 for visits within the APM scope of services
it provides to its APM enrollees.
14138.15. (a) A principal health plan shall be compensated by the
department for the services provided to its APM enrollees pursuant
to this section.
(b) (1) For each principal health plan that contains at least one
participating FQHC in its provider network, the department shall
determine an APM supplemental capitation amount for each APM aid
category to be paid by the department to the principal health plan,
which shall be expressed as a PMPM amount. The APM supplemental
capitation amount shall be a weighted average of the aggregate
wrap-cap amounts determined in subdivision (b) of Section 14138.14,
that at a minimum takes into account an estimation of the
distribution of APM enrollees among the participating FQHCs for each
APM aid category.
(2) The APM supplemental capitation amounts shall not be decreased
for the first three years of the APM pilot project, unless agreed to
by the department and the principal health plan.
(c) The total APM supplemental capitation amounts paid to
principal health plans shall be adjusted by the department as
necessary to take into account adjustments to the number of APM
enrollees by APM aid category no later than the 10th day of each
month.
(d) The department shall adjust the amounts in subdivision (b) at
least annually for any change to the prospective payment system rate
for participating FQHCs, including changes resulting from a change in
the Medicare Economic Index pursuant to subdivision (d) of Section
14132.100, and any changes in the FQHC's scope of services pursuant
to subdivision (e) of Section 14132.100.
14138.16. During the duration of the APM pilot project, the
department shall establish a risk corridor structure for the
principal health plans relating to the payment requirement of Section
14138.15, designed within the following parameters:
(a) (1) The principal health plan is fully responsible for the
total aggregate costs of the wrap-cap payments for all APM aid
categories to participating FQHCs in its network in excess of the
total aggregate APM supplemental capitation amount for all APM aid
categories up to one-half of 1 percent.
(2) The principal health plan shall fully retain the aggregate APM
supplemental capitation amount in excess of the total aggregate
costs of the wrap-cap payments for all APM aid categories incurred up
to one-half of 1 percent.
(b) (1) The principal health plan and the department shall share
responsibility for the total aggregate costs of the wrap-cap payments
for all APM aid categories to participating FQHCs in the principal
health plan's network that are between one-half of 1 percent above
and up to one percent above the total aggregate APM supplemental
capitation amount for all APM aid categories.
(2) The principal health plan and the department shall share the
benefit of the aggregate APM supplemental capitation amount in excess
of the total aggregate costs of the wrap-cap payments for all APM
aid categories incurred that are between one-half of 1 percent and up
to one percent below the total aggregate APM supplemental capitation
amount.
(c) (1) The department shall be fully responsible for the total
aggregate costs of the wrap-cap payments for all APM aid categories
to participating FQHCs in the principal health plan's network that
are more than one percent in excess of the principal health plan's
total aggregate APM supplemental capitation amount for all APM aid
categories.
(2) The department shall fully retain the aggregate APM
supplemental capitation amount in excess of the total aggregate costs
of the wrap-cap payments for all APM aid categories to participating
FQHCs in the principal health plan's network that are greater than
one percent below the total aggregate APM supplemental capitation
amount.
14138.14. (a) A participating FQHC shall be compensated for the
APM scope of services provided to its APM enrollees pursuant to this
section.
(b) A participating FQHC shall receive from the principal health
plan or applicable subcontracting payer reimbursement for each APM
enrollee in the form of a clinic-specific PMPM for the applicable APM
aid category. The department shall determine the clinic-specific
PMPM for each APM aid category taking into account all the following
factors:
(1) Historical utilization of FQHC services by assigned members in
each APM aid category.
(2) The participating FQHC's prospective payment system rate and
applicable adjustments relevant for the fiscal year, such as annual
rate adjustments.
(3) Other trend and utilization adjustments as appropriate in
order to reflect the level of reimbursement that would have been
received by the participating FQHCs in the absence of the APM pilot
project.
(c) A participating FQHC and applicable principal health plan or
subcontracting payer may enter into arrangements in which the
clinic-specific PMPM amount required in subdivision (b) is paid in
more than one capitated increment, as long as the total capitation
each month received by the participating FQHC is equivalent to the
clinic-specific PMPM.
(d) In cases where a subcontracting payer is involved, the
principal health plan shall demonstrate and certify to the
department that it has
contracts or other arrangements in place that provide for meeting the
requirements in subdivision (b) and to the extent that the
subcontracting payer fails to comply with the applicable requirements
in this article, the principal health plan shall then be responsible
to ensure the participating FQHC receives all payments due under
this article in a timely manner.
(e) The department shall adjust the amounts in subdivision (b) as
necessary to account for any change to the prospective payment system
rate for participating FQHCs, including changes resulting from a
change in the Medicare Economic Index pursuant to subdivision (d) of
Section 14132.100, and any changes in the FQHC's scope of services
pursuant to subdivision (e) of Section 14132.100.
(f) An FQHC site participating in the APM pilot project shall not
receive traditional wrap-around payments pursuant to Sections
14132.100 and 14087.325 for visits within the APM scope of services
it provides to its APM enrollees.
14138.15. (a) A principal health plan shall be compensated by the
department for the services provided to its APM enrollees pursuant
to this section.
(b) For each principal health plan that contains at least one
participating FQHC in its provider network, the department shall
determine an APM supplemental capitation amount for each APM aid
category to be paid by the department to the principal health plan,
which shall be expressed as a PMPM amount. This supplemental
capitation amount will be in addition to the funding for the APM
scope of services already contained in the principal health plan's
capitated rates paid by the department and shall be actuarially
sound. The department shall determine the APM supplemental capitation
amount for each APM aid category, taking into account all of the
following factors:
(1) The clinic-specific PMPM amounts for each APM aid category for
each participating FQHC in the plan's network.
(2) The funding for the APM scope of services already contained in
the principal health plan's capitated rates.
(3) The historical wrap-around payments paid by the department for
participating FQHCs for assigned members in each APM aid category.
(4) As applicable, the likely distribution of members among
multiple participating FQHCs.
(c) The principal health plan shall report to the department, in a
form to be determined by the department in consultation with the
principal health plan, the number of APM enrollees for each APM aid
category in the plan each month.
(d) The department shall pay each principal health plan its
applicable APM supplemental capitation amount for the number of APM
enrollees for each APM aid category reported by the principal health
plan pursuant to subdivision (c).
(e) The department, in consultation with the principal health
plans, shall develop methods to verify the information reported
pursuant to subdivision (c), and may adjust the payments made
pursuant to subdivision (d) as appropriate to reflect the verified
number of APM enrollees for each APM aid category.
(f) The department shall adjust the amounts in subdivision (b) as
necessary to account for any change to the prospective payment system
rate for participating FQHCs, including changes resulting from a
change in the Medicare Economic Index pursuant to subdivision (d) of
Section 14132.100, and any changes in the FQHC's scope of services
pursuant to subdivision (e) of Section 14132.100.
14138.16. (a) For the duration of the APM pilot project, the
department shall establish a risk corridor structure for the
principal health plans relating only to the APM supplemental
capitation payments pursuant to Section 14138.15, to the extent
consistent with principals of actuarial soundness.
(b) The risk sharing of the costs under this section shall be
constructed by the department so that it is symmetrical with respect
to risk and profit, and so that all of the following apply:
(1) The principal health plan is fully responsible for all costs
in excess of the APM supplemental capitation amounts up to one-half
of one percent.
(2) The principal health plan shall fully retain the revenues paid
through the APM supplemental capitation amounts in excess of the
costs incurred up to one-half of 1 percent below the APM supplemental
capitation amounts.
(3) The principal health plan and the department shall share
equally in the responsibility for costs in excess of the APM
supplemental capitation amounts that are greater than one-half of 1
percent but less than 1 percent above the APM supplemental capitation
amounts.
(4) The principal health plan and the department shall share
equally the benefit of the revenues paid through the APM supplemental
capitation amounts in excess of the costs incurred that are greater
than one-half of 1 percent but less than 1 percent below the APM
supplemental capitation amounts.
(5) The department shall be fully responsible for all costs in
excess of the APM supplemental capitation amounts that are more than
1 percent above the APM supplemental capitation amounts.
(6) The department shall fully retain the revenues paid through
the APM supplemental capitation amounts in excess of the costs
incurred greater than 1 percent below the supplemental capitation
amounts.
(c) The department shall develop specific contract language to
implement the requirements of this section that shall be incorporated
into the contracts of each affected principal health plan.
(d) This section shall be implemented only to the extent that any
necessary federal approvals or waivers are obtained.
14138.17. (a) In order to ensure participating FQHCs have an
incentive to manage visits and costs, while at the same time
exercising a reasonable amount of flexibility to deliver care in the
most efficient and quality driven manner, during
for the duration of the APM pilot project the department
shall, in accordance with this subdivision, establish a rate
payment adjustment structure. The rate
payment adjustment structure shall be developed
with stakeholder input and shall meet the requirements of Section
1396a(bb)(6)(B) 1396a(bb)(6) of Title
42 of the United States Code.
(b) The rate payment adjustment
structure shall be applicable on a site-specific basis.
(c) The rate payment adjustment
structure shall permit an aggregate adjustment to the
wrap-cap payments received when actual
utilization of services for a participating FQHC's site exceeds or
falls below expectations that were reflected within the calculation
of the rates developed pursuant to Sections 14138.14 and 14138.15.
For purposes of this rate payment
adjustment structure, both actual and expected utilization shall be
expressed as the total number of visits
traditional encounters that would be recognized pursuant to
subdivision (g) of Section 14132.100 for the APM enrollees of the
participating FQHC's site across all APM aid categories and averaged
on a per member per year basis.
(d) An adjustment pursuant to this section shall occur no more
than once per year per participating FQHC's site during the
three years of the APM pilot project and shall be subject
to approval by the department.
(1) An adjustment to the wrap-cap payments in
the case of higher than expected utilization shall be triggered when
utilization exceeds projections by more than 5 percent for the first
year, 71/2 percent for the second year, and 10 percent for the third
year. If the trigger level is reached, the affected FQHC's
reached in a given year, the participating FQHC
site shall receive an aggregate payment adjustment from the
principal health plan or applicable subcontracting payer
that is based upon the difference between its actual
utilization for the year and 105 percent of projected utilization for
the first year, the difference between actual utilization and 1071/2
percent of projected utilization for the second year, and the
difference between actual utilization and 110 percent of projected
utilization for the third year. The payment adjustment in each
instance shall be calculated as follows:
(A) The difference in the applicable utilization levels shall be
multiplied by the per-visit rate that was determined pursuant to
Section 14132.100 for the participating FQHC's site.
(B) The total number of member months for the APM enrollees of the
participating FQHC's site for the year shall be divided by 12.
(C) The amount in subparagraph (A) shall be multiplied by the
amount in subparagraph (B), yielding the aggregate wrap-cap payment
adjustment for the participating FQHC's site. The rate adjustment
shall be paid to the participating FQHC site by the principal health
plan, or secondary payer as applicable, in one aggregate payment.
(2) (A) To incentivize care delivery in ways that may vary from
traditional delivery of care, participating FQHCs shall have the
flexibility to experience a lower than expected visit utilization of
up to 30 percent of projected utilization. If an FQHC site's actual
utilization is at a level that is more than 30 percent lower than the
projected utilization, the principal health plan, or secondary payer
as applicable, shall review the FQHC site's relevant data to
identify the cause or causes of the difference. If the principal
health plan or secondary payer determines that the lower than
expected utilization was due to factors unrelated to delivery system
transformation and enhancements, it may require the FQHC's site to
refund a portion of the wrap-cap payments.
(B) The total amount refunded by the participating FQHC's site to
the principal health plan or secondary payer shall be limited to an
amount calculated as follows:
(i) The difference between the participating FQHC site's actual
utilization and 70 percent of the projected utilization shall be
multiplied by the site's per-visit rate that was determined pursuant
to Section 14132.100.
(ii) The total number of member months for the APM enrollees of
the participating FQHC's site for the year shall be divided by 12.
(iii) The amount in clause (i) shall be multiplied by the amount
in clause (ii), yielding the maximum amount of the refund to be made
by the participating FQHC's site. The refund shall be paid in one
aggregate payment.
(A) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.
(B) The projected total utilization contained in the
clinic-specific PMPMs for the actual APM enrollees for the applicable
year shall be determined.
(C) The amount in subparagraph (B) shall be adjusted to reflect
the applicable comparison utilization for the year as follows:
(i) Multiplied by 1.05 for year one.
(ii) Multiplied by 1.075 for year two.
(ii) Multiplied by 1.1 for year three.
(D) The amount in subparagraph (C) shall be subtracted from the
amount in subparagraph (A).
(E) The amount in subparagraph (D) shall be multiplied by the
per-visit rate that was determined pursuant to Section 14132.100 for
the participating FQHC yielding the payment adjustment for the
participating FQHC site. The payment adjustment shall be paid to the
participating FQHC site by the principal health plan, or
subcontracting payer, as applicable, in one aggregate payment.
(2) (A) To incentivize care delivery in ways that may vary from
traditional delivery of care, participating FQHCs shall have the
flexibility to experience a lower than expected visit utilization of
up to 30 percent of projected utilization. If an FQHC site's actual
utilization is at a level that is more than 30 percent lower than the
projected utilization, the department shall review, in consultation
with the principal health plan, or subcontracting payer, as
applicable, the FQHC site's relevant data to identify the cause or
causes of the difference, including, but not limited to, its volume
of alternative encounters. If the department is able to determine
that all or part of the lower than expected utilization was due to
objective factors developed by the department in consultation with
the principal health plans and FQHCs that are related to delivery
system transformation and enhancements, such as alternative
encounters, the department shall allow the participating FQHC site to
retain all or a portion of the payments attributable to the
utilization decrease that exceeds 30 percent lower than the projected
utilization. If the department is unable to determine that all or a
portion of the utilization decrease in excess of 30 percent was
related to delivery system transformation and enhancements according
to the objective criteria developed pursuant to this subparagraph,
the participating FQHC site shall be required to refund the
applicable payment amount to the participating health plan or
subcontracting payer pursuant to subparagraph (B).
(B) The total amount refunded by the participating FQHC's site to
the principal health plan or subcontracting payer shall be limited to
an amount calculated as follows:
(i) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.
(ii) The projected total utilization contained in the
clinic-specific PMPMs for the actual APM enrollees for the applicable
year shall be determined and multiplied by 70 percent.
(iii) The amount in clause (i) shall be subtracted from the amount
in clause (ii).
(iv) The amount in clause (i) shall be multiplied by the
participating FQHC site's per visit rate that was determined pursuant
to Section 14132.100, yielding the maximum amount of the refund to
be made by the participating FQHC site. The refund shall be paid in
one aggregate payment.
(C) Any adjustment made pursuant to this paragraph shall be
requested by a principal health plan, secondary
subcontracting payer, or FQHC, no later than 90 days after
the last day of the fiscal year for which the adjustment is
sought. that determination by the department pursuant
to subparagraph (A).
14138.18. The department, in consultation with FQHCs and
principal health plans interested in participating in the APM pilot
project, may modify the adjustment process or methodology specified
in Sections 14138.14, 14138.15, 14138.16, and 14138.17 to the extent
necessary to comply with federal law and obtain federal approval of
necessary amendments to the Medi-Cal state plan.
14138.19. A participating FQHC or principal health plan or the
department may request an APM enrollee true-up to assure the total
amount of the APM supplemental capitation or wrap-cap payments, as
applicable, are adjusted to accurately reflect the number of
applicable APM enrollees.
14138.18. (a) The department, in consultation with interested
FQHCs and principal health plans, may modify any methodology or
process specified in this article to the extent necessary to comply
with federal law or to obtain any necessary federal approvals.
(b) This article shall be implemented only to the extent that
federal financial participation is available and any necessary
federal approvals have been obtained.
(c) In the event of a conflict between a provision in this article
and the terms of a federally approved APM, the terms of the
federally approved APM shall control.
14138.19. In the event of an epidemic, or similar catastrophic
occurrence that the department determines is likely to result in at
least a 40 percent increase in actual utilization per member per
month within the APM scope of services for one or more APM aid
categories at a participating FQHC site, the department may adjust,
or require the adjustment of, payments made pursuant to this article
as it deems necessary to account for the utilization increase at the
affected participating FQHC site.
14138.20. (a) (1) Within six months of the conclusion of pilot
project, an evaluation shall be completed by an independent entity.
This independent entity shall report its findings to the department
and the Legislature. The evaluation shall be contingent on the
availability of nonstate General Fund moneys for this
purpose. purpose, and the availability of private
foundation or nonprofit foundation money for this purpose.
(2) A report submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government Code.
(b) The evaluation shall assess whether the APM pilot project
produced improvements in access to primary care services, care
quality, patient experience, and overall health outcomes for APM
enrollees. The evaluation shall include existing FQHC required
quality metrics and an assessment of how the changes in financing
allowed for alternative types of primary care visits and alternative
touches encounters between the
participating FQHC and the patient. patient
and how those changes affected volume of
same-day visits for mental and physical health conditions. The
evaluation shall also assess whether the APM pilot project's efforts
to improve primary care resulted in changes to patient service
utilization patterns, including the reduced utilization of avoidable
high-cost services. services and services
provided outside the FQHC.
14138.21. 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.
14138.22. For purposes of implementing this article, the
department may enter into exclusive or nonexclusive contracts on a
bid or negotiated basis, including contracts for the purpose of
obtaining subject matter expertise or other technical assistance. Any
contract entered into or amended pursuant to this section shall be
exempt from Part 2 (commencing with Section 10100) 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.