SB 815 (Hernandez) Page 3 of 3
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 815
AUTHOR: / Hernandez and De LeonVERSION: / April 11, 2016
HEARING DATE: / April 27, 2016
CONSULTANT: / Scott Bain
SUBJECT: Medi-Cal: demonstration project
SUMMARY:
Enacts the statutory provisions of “Medi-Cal 2020,” the state’s recently approved five-year federal Section 1115 waiver, which runs through December 31, 2020. Implements the Public Hospital Redesign and Incentive in Medi-Cal, the Global Payment Program for county designated public hospitals, the Dental Transformation Initiative, the Whole Person Care program and the access assessment required under the Special Terms of Conditions of Medi-Cal 2020. Urgency bill.
Existing law:
1) Establishes the Medi-Cal program, which is administered by the Department of Health Care Services (DHCS) and under which qualified low-income persons receive health care benefits.
2) Establishes a Medicaid Section 1115 demonstration project under the Medi-Cal program until October 31, 2015 known as California’s Bridge to Reform, to implement specified objectives, including better care coordination for Seniors and Persons with Disabilities (SPDs) and maximization of opportunities to reduce the number of uninsured individuals.
3) Provides for payments under the state’s Bridge to Reform waiver to designated public hospitals (DPHs are the University of California [UC] and county hospitals), and for federal disproportionate share (DSH), payments to private hospitals (referred to as “DSH replacement payments”) and non-designated public hospitals (NDPHs are now referred to as District/Municipal Public Hospitals or DMPH) through October 1, 2015. These provisions:
a) Make DPHs eligible for cost-based fee-for-service (FFS) Medicaid funding using county certified public expenditures (CPEs) as the federal match, instead of state General Fund. DPHs put up the nonfederal share of Medi-Cal FFS payments used to draw down federal Medicaid matching funds, and receive cost-based reimbursement, using CPEs to draw down federal Medicaid matching funds;
b) Provide DSH payments to DPHs, using county CPEs and county intergovernmental transfers (IGTs) to draw down federal DSH funds;
c) Provide DSH payments to eligible DMPHs meeting DSH eligibility criteria, using state General Fund to draw down federal DSH funds;
d) Provide for “DSH replacement payments” to private hospitals meeting DSH eligibility criteria, using non-DSH Medicaid funds and state General Fund as the fund source;
e) Make DPHs eligible for payments from the federally funded Safety Net Care Pool (SNCP) for uncompensated care; and,
f) Make DPHs eligible for payments from the federally funded delivery system reform incentive pool (DSRIP), based on the DPH’s progress toward and achievement of milestones and metrics established in its DSRIP proposal, funded by federal funds and IGTs.
4) Authorizes DHCS to request one or more temporary waiver extensions to continue the operation of, and the authorities provided under, the Bridge to Reform. Requires DHCS to extend and apply the existing hospital payment methodologies and allocations on a state fiscal year, annual, partial year, or other basis, to the extent permitted under any approved temporary waiver extension, an approved subsequent waiver, or as otherwise permitted under federal Medicaid law.
This bill:
1) Requires DHCS to implement the Medi-Cal 2020 Demonstration Project, consistent with federal law and the Special Terms and Conditions (STCs). Requires the STCs to prevail in the event of a conflict between this bill and the STCs.
2) Continues the current Medi-Cal FFS payment methodologies for DPHs from the previous waiver, whereby DPHs receive cost-based reimbursement with county CPEs used to draw down federal Medicaid matching funds, and which require DPHs to receive supplemental reimbursements for the costs incurred by for physician and non-physician services provided to Medi-Cal beneficiaries who are patients of the hospital, to the extent those services are not claimed as inpatient hospital services by the hospital.
3) Requires DSH payments to be paid only to UC DPHs and DMPHs, and requires private DSH hospitals to receive “virtual DSH” payments (also known as “DSH replacement payments”) funded by GF and federal Medicaid funds (instead of federal DSH funds) in the same manner as under the previous waiver, with the federal DSH amounts going to UC DPHs capped by fiscal year. Requires federal DSH payments and federal funds under the SNCP to be used for a new Global Payment Program (GPP).
4) Requires DSH and SNCP payments made to DPHs under specified timeframes to be reconciled to payments under this bill, as specified. Requires DSH and SNCP payment determinations and payments for 2013-14 and 2014-15 fiscal years to be deemed final, as specified.
5) Establishes provisions for repayment in the event of a federal deferral or disallowance, and how to account for a repayment amount in determining a county’s redirection obligation under specified provisions of law requiring counties to shift funds to the state required by AB 85 (Committee on Budget, Chapter 24, and Statutes of 2013).
6) Requires DHCS to implement the new GPP to supporting participating health care systems that provide health care for the uninsured. Requires, under GPP, GPP systems to receive global payments based on the health care they provide to the uninsured, in lieu of traditional DSH payments and payments from an uncompensated care pool (referred to as the SNCP under the prior waiver).
7) Requires GHPP systems to receive GPP payments based on a value-based point methodology that incorporates measures of value for patients in conjunction with the recognition of costs. Requires the points assigned to a particular service or activity to be the same across all GPP systems.
8) Requires DHCS to determine the maximum amount of GPP funding each GPP system would receive, consisting of federal DSH funds for county DPHs and amounts authorized for the uncompensated care component of the GPP as determined under the STCs.
9) Requires DHCS to perform a baseline analysis of the GPP’s system historical volume, cost and mix of services to the uninsured to establish an annual threshold for purposes of GPP. Requires DHCS to determine a pro rate allocation for each GPP system, and an annual budget the GPP system will receive if it achieves its threshold. Requires DHCS to develop a methodology to redistribute unearned GPP funds for a given year to those GPP systems that exceed their threshold in that same year.
10) Prohibits GPP from being construed to constitute or offer health coverage for individuals receiving services, and permits participating GPP systems to determine the scope, type and extent to which services are available to the extent consistent with the STCs. Prohibits the GPP from being construed to decrease, expand or otherwise alter the scope of county’s existing obligation to the medically indigent.
11) Requires the nonfederal share of payment under GPP to be funded by IGTs.
12) Requires DHCS to determine the IGT amount for each GPP system under this bill, and establishes different GPP payment amounts for each county DPH system, as specified.
13) Requires DHCS, if it determines, after consulting with GPP systems, to terminate the GPP in subsequent years, to notify CMS.
14) Requires DHCS to establish and operate the PRIME program, which is intended to accelerate efforts by participating PRIME entities to change care delivery to maximize health care value and strengthen their ability to successfully perform under risk-based alternative payment models (APM). PRIME is the successor to the DSRIP from the previous waiver.
15) Designates DPHs and DMPHs as participating PRIME entities. Subject to the STCs, authorizes up to $1.2 billion available to DPHs and $200 million available to DMPHs.
16) Makes participating PRIME entities eligible to earn incentive payments by undertaking projects set forth in the STCs for which there are required metrics.
17) Requires that PRIME payments to be incentive payments and not payments for services otherwise reimbursable under Medi-Cal. Prohibits expenditures by PRIME entities from offsetting payment amounts otherwise payable by Medi-Cal or Medi-Cal managed care plans or otherwise supplant provider payments payable to PRIME entities.
18) Requires PRIME entities, within 30 days following federal approval of protocols for PRIME projects, metrics and funding, to submit a five-year PRIME project plan containing the specific elements of the STCs. Requires DHCS to review all five-year PRIME project plans and take action within 60 days to approve or disapprove each plan.
19) Requires each PRIME entity to submit reports to DHCS twice a year demonstrating progress toward required metric targets, using a standardized form developed jointly by DHCS and participating PRIME entities.
20) Establishes provisions for the amount of PRIME incentive payments payable to a participating PRIME entity, and requires amounts payable to each PRIME entity to be determined using the methodology in the STCs.
21) Makes each participating PRIME entity individually responsible for progress toward and achievement of project specific metrics targets. Requires that participating PRIME entities earn reduced payment for partial achievement, as described in the STCs.
22) Requires the nonfederal share of PRIME payments to consist of voluntary IGTs.
23) Requires DPH systems to contract with at least one Medi-Cal managed care plan in the service area where they operate using an APM by January 1, 2018. Permits DHCS to waive this requirement if the DPH system is unable to meet the requirement and can demonstrate that it has made a good faith effort to contract.
24) Requires DPHs and Medi-Cal managed care plans to seek to strengthen their data and information sharing for purposes of identifying and treating applicable beneficiaries, including the timely sharing and reporting of beneficiary data, assessment and treatment information.
25) Requires DHCS to establish and operate the Whole Person Care (WPC) pilot program as authorized under Medi-Cal 2020 to allow for development of WPC pilots focused on target populations of high-risk, high-utilizing Medi-Cal beneficiaries in local geographic areas.
26) Establishes as the goal of WPC is the coordination of health, behavioral health, and social services, as applicable, in a patient-centered manner to improve beneficiary health and well-being through more efficient and effective use of resources.
27) Requires WPC pilots to provide an option to a county, city and county, a health or hospital authority or a consortium of any of these entities to receive support to integrate care for particularly vulnerable Medi-Cal beneficiaries who have been identified as high users of multiple systems and who continue to have or are at-risk of poor health outcomes.
28) Defines the WPC target population as the population or populations identified by a WPC pilot through a collaborative data approach across partnering entities that identifies common Medi-Cal high-risk, high-utilizing beneficiaries who frequently access urgent and emergency services, including across multiple systems. Permits, at the discretion of the WPC lead entity, and in accordance with guidance as may be issued by DHCS during the application process and approved by DHCS, the WPC target population to include individuals who are not Medi-Cal patients, subject to the funding restrictions in the STCs regarding the availability of FFP for services provided to these individuals.
29) Requires WPC pilots to include specific strategies to increase integration among local governmental agencies, health plans, providers, and other entities that serve high-risk, high-utilizing beneficiaries, increase coordination and appropriate access to care, reduce inappropriate inpatient and emergency room utilization, improve data collection and sharing among local entities, improve health outcomes for the WPC target population and permits it to include other strategies to increase access to housing and supportive services.
30) Requires WPC pilots to be approved by DHCS through the process outlined in the STCs.
31) Makes receipt of WPC services voluntary, and permits beneficiaries to opt out at any time.
32) Requires the WPC lead entity to be responsible for operating the WPC pilot, conducting ongoing monitoring of WPC participating entities, arranging for the required reporting, ensuring an appropriate financial structure is in place, and identifying and securing a permissible source of the nonfederal share for WPC pilot payments.
33) Requires each WPC pilot to include, at a minimum, all of the following entities as WPC participating entities in addition to the WPC lead entity:
a) At least one Medi-Cal managed care plan operating in the geographic area of the WPC pilot;
b) The health services agency or agencies or department or departments for the geographic region where the WPC pilot operates, or any other public entity operating in that capacity for the county or city and county;
c) The local entities, agencies, or departments responsible for specialty mental health services for the geographic area where the WPC pilot operates;
d) At least one other public agency or department, which may include, but is not limited to, county alcohol and substance use disorder programs, human services agencies, public health departments, criminal justice or probation entities, and housing authorities, regardless of how many of these fall under the same agency head within the geographic area where the WPC pilot operates; and,
g) At least two other community partners serving the target population within the applicable geographic area.
34) Permits a WPC lead entity to request an exemption from this requirement from DHCS if a WPC lead entity cannot reach an agreement with a required participant.
35) Requires DHCS to enter into a pilot agreement with each WPC lead entity approved for participation in the WPC pilot program.
36) Permits the sharing of health information, records, and other data with and among WPC lead entities, and allows WPC participating entities to share health information, records, and other data with and among prospective WPC lead entities and WPC participating entities in the process of identifying a proposed target population and preparing an application for a WPC pilot.
37) Permits WPC pilots to target the focus of their pilot on individuals at risk of or are experiencing homelessness who have a demonstrated medical need for housing or supportive services. Requires, in these instances, WPC participating entities to include local housing authorities, local continuum of care programs, community-based organizations, and others serving the homeless population as entities collaborating and participating in the WPC pilot.
38) Permits the housing interventions to include tenancy-based care management services, defined as supports to assist the target population in locating and maintaining medically necessary housing, and countywide housing pools.