SECTIONS 14089-14089.8 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14089-14089.8

14089. (a) The purpose of this article is to provide a
comprehensive program of managed health care plan services to
Medi-Cal recipients residing in clearly defined geographical areas.
It is, further, the purpose of this article to create maximum
accessibility to health care services by permitting Medi-Cal
recipients the option of choosing from among two or more managed
health care plans or fee-for-service managed case arrangements,
including, but not limited to, health maintenance organizations,
prepaid health plans, and primary care case management plans.
Independent practice associations, health insurance carriers, private
foundations, and university medical centers systems, not-for-profit
clinics, and other primary care providers, may be offered as choices
to Medi-Cal recipients under this article if they are organized and
operated as managed care plans, for the provision of preventive
managed health care plan services.
(b) The department may seek proposals and then shall enter into
contracts based on relative costs, extent of coverage offered,
quality of health services to be provided, financial stability of the
health care plan or carrier, recipient access to services,
cost-containment strategies, peer and community participation in
quality control, emphasis on preventive and managed health care
services and the ability of the health plan to meet all requirements
for both of the following:
(1) Certification, where legally required, by the Director of the
Department of Managed Health Care and the Insurance Commissioner.
(2) Compliance with all of the following:
(A) The health plan shall satisfy all applicable state and federal
legal requirements for participation as a Medi-Cal managed care
contractor.
(B) The health plan shall meet any standards established by the
department for the implementation of this article.
(C) The health plan receives the approval of the department to
participate in the pilot project under this article.
(c) (1) (A) The proposals shall be for the provision of preventive
and managed health care services to specified eligible populations
on a capitated, prepaid, or postpayment basis.
(B) Enrollment in a Medi-Cal managed health care plan under this
article shall be voluntary for beneficiaries eligible for the federal
Supplemental Security Income for the Aged, Blind, and Disabled
Program (Subchapter 16 (commencing with Section 1381) of Chapter 7 of
Title 42 of the United States Code).
(2) The cost of each program established under this section shall
not exceed the total amount that the department estimates it would
pay for all services and requirements within the same geographic area
under the fee-for-service Medi-Cal program.
(d) (1) An eligible beneficiary shall be entitled to enroll in any
health care plan contracted for pursuant to this article that is in
effect for the geographic area in which he or she resides. The
department shall make available to recipients information summarizing
the benefits and limitations of each health care plan available
pursuant to this section in the geographic area in which the
recipient resides. A Medi-Cal or CalWORKs applicant or beneficiary
shall be informed of the health care options available regarding
methods of receiving Medi-Cal benefits. The county shall ensure that
each beneficiary is informed of these options and informed that a
health care options presentation is available.
(2) No later than 30 days following the date a Medi-Cal or
CalWORKs recipient is informed of the health care options described
in paragraph (1), the recipient shall indicate his or her choice, in
writing, of one of the available health care plans and his or her
choice of primary care provider or clinic contracting with the
selected health care plan. Notwithstanding the 30-day deadline set
forth in this paragraph, if a beneficiary requests a directory for
the entire service area within 30 days of the date of receiving an
enrollment form, the deadline for choosing a plan shall be extended
an additional 30 days from the date of that request.
(3) The health care options information described in this
subdivision shall include the following elements:
(A) Each beneficiary or eligible applicant shall be provided, at a
minimum, with the name, address, telephone number, and specialty, if
any, of each primary care provider, by specialty or clinic
participating in each managed health care plan option through a
personalized provider directory for that beneficiary or applicant.
This information shall be presented under the geographic area
designations by the name of the primary care provider and clinic, and
shall be updated based on information electronically provided
monthly by the health care plans to the department, setting forth
changes in the health care plan provider network. The geographic
areas shall be based on the applicant's residence address, the minor
applicant's school address, the applicant's work address, or any
other factor deemed appropriate by the department, in consultation
with health plan representatives, legislative staff, and consumer
stakeholders. In addition, directories of the entire service area,
including, but not limited to, the name, address, and telephone
number of each primary care provider and hospital, of all Geographic
Managed Care health plan provider networks shall be made available to
beneficiaries or applicants who request them from the health care
options contractor. Each personalized provider directory shall
include information regarding the availability of a directory of the
entire service area, provide telephone numbers for the beneficiary to
request a directory of the entire service area, and include a
postage-paid mail card to send for a directory of the entire service
area. The personalized provider directory shall be implemented as a
pilot project in Sacramento County pursuant to this article, and in
Los Angeles County (Two-Plan Model) pursuant to Article 2.7
(commencing with Section 14087.305). The content, form, and
geographic areas used shall be determined by the department in
consultation with a workgroup to include health plan representatives,
legislative staff, and consumer stakeholders, with an emphasis on
the inclusion of stakeholders from Los Angeles and Sacramento
Counties. The personalized provider directories may include a section
for each health plan. Prior to implementation of the pilot project,
the department, in consultation with consumer stakeholders,
legislative staff, and health plans, shall determine the parameters,
methodology, and evaluation process of the pilot project. The pilot
project shall thereafter be in effect for a minimum of two years.
Three months prior to the end of the first two years of the pilot
project, the department shall promptly provide the fiscal and policy
committees of the Legislature with an evaluation of the personalized
provider directory pilot project and its impact on the Medi-Cal
managed care program, including whether the pilot project resulted in
a reduction of default assignments and a more informed choice
process for beneficiaries, and its overall cost-benefit to the state.
Following two years of operation as a pilot project in two counties
and submission of the evaluation to the Legislature, the department,
in consultation with consumer stakeholders, legislative staff, and
health plans, shall determine whether to implement personalized
provider directories as a permanent program statewide. This
determination shall be based on the outcomes set forth in the
evaluation provided to the Legislature. If necessary, the pilot
project shall continue beyond the initial two-year period until this
determination is made. This pilot project shall only be implemented
to the extent that it is budget neutral to the department.
(B) Each beneficiary or eligible applicant shall be informed that
he or she may choose to continue an established patient-provider
relationship in a managed care option, if his or her treating
provider is a primary care provider or clinic contracting with any of
the health plans available and has the available capacity and agrees
to continue to treat that beneficiary or eligible applicant.
(C) Each beneficiary or eligible applicant shall be informed that
if he or she fails to make a choice, he or she shall be assigned to,
and enrolled in, a health care plan.
(4) At the time the beneficiary or eligible applicant selects a
health care plan, the department shall, when applicable, encourage
the beneficiary or eligible applicant to also indicate, in writing,
his or her choice of primary care provider or clinic contracting with
the selected health care plan.
(5) Commencing with the implementation of a geographic managed
care project in a designated county, a Medi-Cal or CalWORKs
beneficiary who does not make a choice of health care plans in
accordance with paragraph (2), shall be assigned to and enrolled in
an appropriate health care plan providing service within the area in
which the beneficiary resides.
(6) If a beneficiary or eligible applicant does not choose a
primary care provider or clinic, or does not select a primary care
provider who is available, the health care plan selected by or
assigned to the beneficiary shall ensure that the beneficiary selects
a primary care provider or clinic within 30 days after enrollment or
is assigned to a primary care provider within 40 days after
enrollment.
(7) A Medi-Cal or CalWORKs beneficiary dissatisfied with the
primary care provider or health care plan shall be allowed to select
or be assigned to another primary care provider within the same
health care plan. In addition, the beneficiary shall be allowed to
select or be assigned to another health care plan contracted for
pursuant to this article that is in effect for the geographic area in
which he or she resides in accordance with Section 1903(m)(2)(F)(ii)
of the Social Security Act.
(8) The department or its contractor shall notify a health care
plan when it has been selected by or assigned to a beneficiary. The
health care plan that has been selected or assigned by a beneficiary
shall notify the primary care provider that has been selected or
assigned. The health care plan shall also notify the beneficiary of
the health care plan and primary care provider selected or assigned.
(9) This section shall be implemented in a manner consistent with
any federal waiver that is required to be obtained by the department
to implement this section.
(e) A participating county may include within the plan or plans
providing coverage pursuant to this section, employees of county
government, and others who reside in the geographic area and who
depend upon county funds for all or part of their health care costs.
(f) Funds may be provided to prospective contractors to assist in
the design, development, and installation of appropriate programs.
The award of these funds shall be based on criteria established by
the department.
(g) In implementing this article, the department may enter into
contracts for the provision of essential administrative and other
services. Contracts entered into under this subdivision may be on a
noncompetitive bid basis and shall be exempt from Chapter 2
(commencing with Section 10290) of Part 2 of Division 2 of the Public
Contract Code.
(h) Notwithstanding any other provision of law, on and after the
effective date of the act adding this subdivision, the department
shall have exclusive authority to set the rates, terms, and
conditions of geographic managed care contracts and contract
amendments under this article. As of that date, all references to
this article to the negotiator or to the California Medical
Assistance Commission shall be deemed to mean the department.
(i) Notwithstanding subdivision (q) of Section 6254 of the
Government Code, a contract or contract amendments executed by both
parties after the effective date of the act adding this subdivision
shall be considered a public record for purposes of the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code) and shall be disclosed
upon request. This subdivision includes contracts that reveal the
department's rates of payment for health care services, the rates
themselves, and rate manuals.

14089.05. (a) (1) The department may implement a multiplan project
in the County of San Diego, upon approval of the Board of Supervisors
of the County of San Diego, for the provision of benefits under this
chapter to eligible Medi-Cal recipients. The multiplan project
implemented in San Diego County pursuant to this section shall
provide diagnostic, therapeutic, and preventive services provided
under the Medi-Cal program, and additional benefits including, but
not limited to, medical-related transportation, comprehensive patient
management, and referral to other support services.
(2) The County of San Diego shall be eligible to receive funds
transferred pursuant to paragraph (1) of subdivision (p) of Section
14163 for the development and implementation of this section. These
funds in the amount allocated by the department for the County of San
Diego shall be paid by the department upon the enactment of this
section to the County of San Diego to reimburse a portion of the
costs of the development of the project. To the full extent permitted
by state and federal law, these funds shall be distributed by the
department for expenditure by the County of San Diego in a manner
that qualifies for federal financial participation under the Medicaid
Program and the department shall expedite the payment of the federal
funds to the County of San Diego. The department shall seek
additional state, federal, and other funds to pay for costs that are
incurred by the County of San Diego to develop the multiplan project
in excess of the payment required by this section, and the department
shall assist the county in obtaining the additional funds.
(b) (1) The County of San Diego may establish two advisory boards,
one of which shall be composed of consumer representatives and the
other of which shall be composed of health care professional's
representatives. Each board shall advise the Department of Health
Services of the County of San Diego and review and comment on all
aspects of the implementation of the multiplan project. At least one
of the members of each advisory board shall be appointed by the board
of supervisors. The board of supervisors shall establish a number of
members to serve on each advisory board, with each supervisor to
appoint an equal number of members from his or her district. Each
advisory board shall vote on all pilot project policies and issues
that are submitted to the board of supervisors.
(2) Notwithstanding any other provision of law, a member of an
advisory board established pursuant to this section shall not be
deemed to be interested in a contract entered into by the department
within the meaning of Article 4 (commencing with Section 1090) of
Chapter 1 of Division 4 of Title 1 of the Government Code if the
member is a Medi-Cal recipient or if all of the following apply:
(A) The member was appointed to represent the interests of
physicians, health care practitioners, hospitals, pharmacies, or
other health care organizations.
(B) The contract authorizes the member or the organization the
member represents to provide Medi-Cal services under the multiplan
project.
(C) The contract contains substantially the same terms and
conditions as contracts entered into with other individuals or
organizations the member was appointed to represent.
(D) The member does not influence or attempt to influence the
joint advisory board or another member of the joint advisory board to
recommend that the department enter into the contract in which the
member is interested.
(E) The member discloses the interest to the joint advisory board
and abstains from voting on any recommendation on the contract.
(F) The advisory board notes the member's disclosure and
abstention in its official records.
(3) Members of the advisory boards shall not be paid compensation
for activities relating to their duties as members, but members who
are Medi-Cal recipients shall be reimbursed an appropriate amount by
the County of San Diego for travel and child care expenses incurred
in performing their duties under this section.
(c) At the discretion of the department, the County of San Diego,
the department, or other appropriate entities may perform any of the
following in a manner that accomplishes the integration of the intake
of eligible beneficiaries to the project, the assessment of
beneficiary individual and family needs and circumstances, and the
timely referral of beneficiaries to health care and other services to
respond to their individual and family needs:
(1) Determine the eligibility of Medi-Cal applicants and
recipients in a manner and environment that is accessible to the
recipients and applicants.
(2) Perform enrollment activities in a manner that ensures that
recipients be given the opportunity to select the provider of their
choice in a manner and environment that is accessible to the
recipients.
(3) The department may negotiate and amend its contract with the
county to provide for specified quality improvement activities, and
may require each of the health plans to participate in those
activities. The department shall also participate in the county's
quality improvement activities.
(d) Notwithstanding Section 14089 or any other provision of law,
the County of San Diego, when contracting with the department
pursuant to this section or subdivision (d), (i), or (j) of Section
14089, shall not be liable for damages for injury to persons or
property arising out of the actions or inactions of the department,
the department's other contractors, or providers of health care or
other services, or Medi-Cal recipients. This section shall not
relieve the County of San Diego from liability arising out of its
actions or inactions.
(e) The County of San Diego, when contracting with the department
pursuant to Section 14089 or this section, shall have no legal duty
to provide health care or other services to Medi-Cal recipients, and
shall have no financial responsibility for the department's other
contractors or providers of health care or other services, except to
the extent specifically set forth in contracts between the department
and the county.
(f) Notwithstanding Section 14089.6, the department may terminate
any existing managed care contract with either a prepaid health plan
or a primary care case management plan for services in the County of
San Diego in accordance with the terms and conditions set forth in
the existing contract, at any time that the department determines
that termination is in the best interest of the state. The department
shall notify an existing prepaid health plan at least 90 days prior
to termination. The department shall notify a primary care case
management plan at least 30 days prior to termination.
(g) All contracts entered into by the department and the County of
San Diego pursuant to Section 14089 or this section shall not be for
the benefit of any third party, and no third-party beneficiary
relationship shall be established between the county and any other
party, except as may be specifically set forth in contracts between
the department and the County of San Diego.
(h) The department shall report to the appropriate committees of
the Legislature on the project implemented pursuant to this section.
(i) (1) For purposes of this section, "multiplan project" means a
program authorized by this section in which a number of Knox-Keene
licensed health plans designated by the county and approved by the
department shall be the only Medi-Cal managed care health plans
authorized to operate within San Diego County, with the exception of
special projects approved by the department.
(2) Designated health plans shall include, but not be limited to,
health plans sponsored by traditional Medi-Cal physicians,
neighborhood health centers, community clinics, health systems,
including hospitals and other providers, or a combination thereof.
(3) Participating health plans shall first be designated by the
county for approval by the department. Health plans approved by the
department shall be eligible to contract with the department.
Designation by the county and approval by the department provides the
health plan only with the opportunity to compete for a contract and
does not guarantee a contract with the state.
(4) Designation requirements imposed by the county shall not
conflict with the requirements imposed by the department, the federal
Medicaid Program, and the Medi-Cal program, and may not impose
stricter requirements, without the department's approval, than those
imposed by the department, the federal Medicaid Program, and the
Medi-Cal program.
(5) Designation of health plans by the county will continue for
the term of the Medi-Cal contract.
(j) Nothing in this section relieves the county of duties or
liabilities imposed by Part 5 (commencing with Section 17000) or
which it has assumed through contract with entities other than the
department.
(k) Indian health facilities in San Diego County may contract
directly with the department as Medi-Cal fee-for-service case
management providers apart from the geographic managed care program
or may participate in the network of one or more of the geographic
managed care plans. Indian health service facilities that contract
with the department as fee-for-service case management providers may
enroll Medi-Cal recipients, including, but not limited to, recipients
who are in any of the geographic managed care mandatory enrollment
aid codes.

14089.07. (a) The Sacramento County Department of Health and Human
Services may establish a stakeholder advisory committee to provide
input on the delivery of health care services provided in the county
pursuant to this article, Section 14182, and Part 3.6 (commencing
with Section 15909). The advisory committee shall include, but not be
limited to, Medi-Cal beneficiaries, patient representatives, health
care providers, and representatives of Medi-Cal managed care health
plans.
(b) The advisory committee may submit written input to the State
Department of Health Care Services regarding policies that improve
coordination with traditional and safety net providers, enhance the
capacity of the county's health care delivery system, and improve
health care services and health outcomes.
(c) The advisory committee may request, in writing, and receive
final reports submitted to the department by any managed care health
plan operating in Sacramento County as long as the report is not
exempt from disclosure pursuant to Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code, or any
other contractual, statutory, or legal exemption, or privilege. The
advisory committee may review and provide written comments to the
department on these reports, that may include issues such as
evaluation of access, quality, and consumer protections.
(d) No state General Fund moneys shall be used to fund advisory
committee costs, nor to fund any related administrative costs
incurred by the county.

14089.1. In accordance with procedures required by Section 14408,
all marketing activities shall require prior approval of the
department.

14089.2. In accordance with procedures required by Chapter 8
(commencing with Section 14200), each contract with a capitated
health system shall provide for a grievance procedure under which
Medi-Cal beneficiaries may submit their grievances. The department
shall establish standards for these procedures to include appeals to
an entity other than the capitated health system.

14089.3. The department shall not contract with insurance carriers,
organized health systems, or provider organizations, that employ or
subcontract with plans that employ providers under suspension from
the Medicare or Medi-Cal program.

14089.4. The department may consult with the Department of
Insurance or the Department of Managed Health Care and shall consult
with the Department of Justice Medi-Cal Fraud Unit, the appropriate
licensing boards, and the laboratory field services unit of the
department for the purposes of determining the qualifications,
performance capability, and financial stability of prospective
contractors.

14089.5. (a) The department or its authorized agents shall conduct
periodic audits or review, including onsite audits or review, to
monitor compliance with Article 4 (commencing with Section 14400) of
Chapter 8 with regard to any contract made pursuant to this article.
These reviews may be conducted with or without notice and may include
assistance by the Attorney General if requested.
(b) The department may terminate a contract, in whole or in part,
when the director determines that this action is necessary to protect
the health of the beneficiaries or the funds appropriated to carry
out the Medi-Cal program.

14089.6. Current prepaid health plan and primary care case
management contracts entered into by the department pursuant to
Chapter 7 (commencing with Section 14088) and Chapter 8 (commencing
with Section 14200) shall not be terminated solely due to the
implementation of this article in areas served by prepaid health
plans and primary care case management contractors. Upon expiration
of these contracts, the department shall enter into good faith
negotiations for one renewal of these contracts. These plans may
continue to serve their Medi-Cal enrollees and to enroll new
beneficiaries. Upon expiration or final termination of these renewal
contracts and subject to compliance with all applicable requirements
prepaid health plan and primary care case management contractors in
the areas shall be allowed the opportunity to participate as new
contractors under this article.

14089.7. (a) The department may adopt emergency regulations to
implement this article in accordance with the rulemaking provisions
of the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code). The initial adoption of emergency regulations and one
readoption of the initial regulations shall be deemed to be an
emergency and necessary for the immediate preservation of the public
peace, health and safety, or general welfare. Initial emergency
regulations and the first readoption of those regulations shall be
exempt from review by the Office of Administrative Law. The initial
emergency regulations and the first readoption of those regulations
authorized by this section shall be submitted to the Office of
Administrative Law for filing with the Secretary of State and
publication in the California Code of Regulations and each shall
remain in effect for no more than 180 days.
(b) All regulations adopted pursuant to this section prior to the
repeal and addition of this section by the act adding this section
shall remain in full force and effect unless they are repealed or
amended by the department in accordance with the Administrative
Procedure Act.

14089.8. (a) In order to achieve maximum cost savings, the
Legislature finds and declares that an expedited contract process for
contracts under this article is necessary.
(b) Contracts under this article shall be on a nonbid basis, and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.