SECTIONS 14180-14183.6 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14180-14183.6

14180. (a) The department shall submit an application to the
federal Centers for Medicare and Medicaid Services for a waiver or a
demonstration project to implement all of the following:
(1) Strengthen California's health care safety net, which includes
disproportionate share hospitals, for low-income and vulnerable
Californians.
(2) Maximize opportunities to reduce the number of uninsured
individuals.
(3) Optimize opportunities to increase federal financial
participation and maximize financial resources to address
uncompensated care.
(4) Promote long-term, efficient, and effective use of state and
local funds.
(5) Improve health care quality and outcomes.
(6) Promote home-and community-based care.
(b) The waiver or demonstration project shall include proposals to
restructure the organization and delivery of services to be more
responsive to the health care needs of Medi-Cal enrollees for the
purpose of providing the most vulnerable Medi-Cal beneficiaries with
access to better coordinated and integrated care that will improve
their health outcomes, slow the long-term growth of the Medi-Cal
program, and continue support for the safety net care system and the
persons who rely on that system for needed care. These restructuring
proposals may include, but are not limited to, the following:
(1) Better care coordination for seniors and persons with
disabilities, dual eligibles, children with special health care
needs, and persons with behavioral health conditions, which shall
include the establishment of organized delivery systems that
incorporate a medical home system and care and disease management, as
well as incentives that reward providers and beneficiaries for
achieving the desired clinical, utilization, and cost-specific
outcomes.
(2) Improved coordination between Medicare and Medi-Cal coverage.
(3) Improved coordination of care for children with significant
medical needs through improved integration of delivery systems and
use of medical homes and specialty centers, and providing incentives
for specialty and nonspecialty care.
(4) Improved integration of physical and behavioral health care.
(c) In developing the waiver or demonstration project application,
the department shall consult on a regular basis with interested
stakeholders and the Legislature.
(d) The department shall determine the form of waiver most
appropriate to achieve the purposes listed in subdivision (a).
(e) The department shall submit the waiver or demonstration
project application to the federal Centers for Medicare and Medicaid
Services by a date that allows sufficient time for the waiver or
demonstration project to be approved by no later than September 1,
2010, or the conclusion of any extension period granted in California'
s Medi-Cal Hospital/Uninsured Care Section 1115(a) Medicaid
Demonstration (No. 11-W-00193/9), whichever happens last.
(f) In order to restructure the Medi-Cal program to improve the
delivery of care for specified populations and secure the maximum
amount of federal financial participation allowable, any waiver or
demonstration project application submitted pursuant to subdivision
(a) may specify and seek authority to enroll beneficiaries into
specified organized delivery systems. Subject to federal approval,
the specified organized delivery systems may include the utilization
of an enhanced primary care case management model, a medical home
model, or managed care model. The department is authorized to enroll
beneficiaries in an organized system of care subject to the
conditions in Section 14181. Subject to federal approval, any waiver
or demonstration project application submitted pursuant to
subdivision (a) shall include processes, and accompanying criteria,
by which the department will evaluate and grant exemption, on an
individual basis, from this section's requirements pertaining to the
mandatory enrollment of beneficiaries in specified organized delivery
systems.
(g) (1) The department shall only implement the waiver or
demonstration project upon submittal of an implementation plan,
pursuant to Section 14181, to the appropriate policy and fiscal
committees of the Legislature at least 60 days prior to any
appropriation.
(2) Pursuant to paragraph (1), mandatory enrollment in any
organized delivery system authorized pursuant to a waiver or
demonstration project authorized pursuant to this article shall only
occur when funds necessary to support that effort have been
appropriated.
(3) It is the intent of the Legislature to neither impede nor
limit the department's existing statutory authority regarding the
operation of the Medi-Cal program and its health care delivery
systems by the enactment of this article.
(h) The director shall have the discretion to utilize state plan
amendments, in whole or in part, to accomplish any or all purposes of
this article. In the event the director proceeds with state plan
amendments as specified, the department shall provide notification in
writing to the chairperson of the Joint Legislative Budget Committee
within 15 working days of that action and a brief description and
purpose of the amendment. This amendment shall be made available to
the Joint Legislative Budget Committee upon the request of the
chairperson.

14181. (a) The California Health and Human Services Agency or
successor entity or designated department shall submit an
implementation plan to the appropriate policy and fiscal committees
of the Legislature for implementation of the federally approved
waiver or demonstration project. The implementation plan shall be
developed in consultation with a stakeholder advisory committee
established pursuant to subdivision (b). The implementation plan
shall specifically address the multiple and complex needs of seniors
and persons with disabilities, dual eligibles, children with special
health care needs, and persons with behavioral health conditions, and
the specific strategies the agency or successor entity or designated
department will use to ensure the provision of quality, accessible
health care services under the waiver or demonstration project,
including, at a minimum, the following elements:
(1) Criteria, performance standards, and indicators shall be
adopted to ensure that plan services meet the multiple and complex
needs of beneficiaries and comply with the requirements of this
article. The performance standards shall incorporate, at a minimum,
existing statutory and regulatory requirements and protections
applicable to two-plan model and geographic managed care plans, as
well as those protections available under the Knox-Keene Health Care
Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340)
of Division 2 of the Health and Safety Code), but in addition shall
include specific requirements and standards based on the multiple and
complex care needs of seniors and persons with disabilities, dual
eligibles, children with special health care needs, and persons with
behavioral health conditions, including, but not limited to,
standards where applicable to the organized delivery system model in
all of the following areas:
(A) Plan readiness.
(B) Availability and accessibility of services, including physical
access and communication access.
(C) Benefit management and scope of services.
(D) Care coordination and care management.
(E) Beneficiary complaints, grievances, and appeals.
(F) Beneficiary participation.
(G) Continuity of care.
(H) Cultural and linguistic appropriateness.
(I) Financial management.
(J) Measurement and improvement of health outcomes.
(K) Marketing, assignment, enrollment, and disenrollment.
(L) Network capacity, including travel time and distance and
specialty care access.
(M) Performance measurement and improvement.
(N) Provider grievances and appeals.
(O) Quality care.
(P) Recordkeeping and reporting.
(2) Strategies to be used to monitor performance of all
contractors and to ensure compliance with all components of the
waiver or demonstration project.
(3) Provision of a comprehensive timeline of key milestones for
implementation of the waiver or demonstration project components.
(4) Provision of a framework for evaluation of the waiver or
demonstration project, including the process, timelines, and criteria
for evaluating implementation, as well as the method for providing
periodic updates of outcomes and key implementation concerns.
(b) Prior to preparing the implementation plan required by this
section, the agency or successor entity or designated department,
shall convene a stakeholder committee to advise on preparation of the
implementation plan. The stakeholder committee shall include, but
not be limited to, persons with disabilities, seniors, and
representatives of legal services agencies that serve clients in the
affected populations, health plans, specialty care providers,
physicians, hospitals, county government, labor, and others as deemed
appropriate by the agency or successor entity or designated
department. The stakeholder committee shall advise on the
implementation of the waiver or demonstration project until the
expiration of the waiver or demonstration project.

14182. (a) (1) In furtherance of the waiver or demonstration
project developed pursuant to Section 14180, the department may
require seniors and persons with disabilities who do not have other
health coverage to be assigned as mandatory enrollees into new or
existing managed care health plans. To the extent that enrollment is
required by the department, an enrollee's access to fee-for-service
Medi-Cal shall not be terminated until the enrollee has been assigned
to a managed care health plan.
(2) For purposes of this section:
(A) "Other health coverage" means health coverage providing the
same full or partial benefits as the Medi-Cal program, health
coverage under another state or federal medical care program, or
health coverage under contractual or legal entitlement, including,
but not limited to, a private group or indemnification insurance
program.
(B) "Managed care health plan" means an individual, organization,
or entity that enters into a contract with the department pursuant to
Article 2.7 (commencing with Section 14087.3), Article 2.81
(commencing with Section 14087.96), Article 2.91 (commencing with
Section 14089), or Chapter 8 (commencing with Section 14200).
(b) In exercising its authority pursuant to subdivision (a), the
department shall do all of the following:
(1) Assess and ensure the readiness of the managed care health
plans to address the unique needs of seniors or persons with
disabilities pursuant to the applicable readiness evaluation criteria
and requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48.
(2) Ensure the managed care health plans provide access to
providers that comply with applicable state and federal laws,
including, but not limited to, physical accessibility and the
provision of health plan information in alternative formats.
(3) Develop and implement an outreach and education program for
seniors and persons with disabilities, not currently enrolled in
Medi-Cal managed care, to inform them of their enrollment options and
rights under the demonstration project. Contingent upon available
private or public dollars other than moneys from the General Fund,
the department or its designated agent for enrollment and outreach
may partner or contract with community-based, nonprofit consumer or
health insurance assistance organizations with expertise and
experience in assisting seniors and persons with disabilities in
understanding their health care coverage options. Contracts entered
into or amended pursuant to this paragraph shall be exempt from
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of
the Public Contract Code and any implementing regulations or policy
directives.
(4) At least three months prior to enrollment, inform
beneficiaries who are seniors or persons with disabilities, through a
notice written at no more than a sixth grade reading level, about
the forthcoming changes to their delivery of care, including, at a
minimum, how their system of care will change, when the changes will
occur, and who they can contact for assistance with choosing a
delivery system or with problems they encounter. In developing this
notice, the department shall consult with consumer representatives
and other stakeholders.
(5) Implement an appropriate cultural awareness and sensitivity
training program regarding serving seniors and persons with
disabilities for managed care health plans and plan providers and
staff in the Medi-Cal Managed Care Division of the department.
(6) Establish a process for assigning enrollees into an organized
delivery system for beneficiaries who do not make an affirmative
selection of a managed care health plan. The department shall develop
this process in consultation with stakeholders and in a manner
consistent with the waiver or demonstration project developed
pursuant to Section 14180. The department shall base plan assignment
on an enrollee's existing or recent utilization of providers, to the
extent possible. If the department is unable to make an assignment
based on the enrollee's affirmative selection or utilization history,
the department shall base plan assignment on factors, including, but
not limited to, plan quality and the inclusion of local health care
safety net system providers in the plan's provider network.
(7) Review and approve the mechanism or algorithm that has been
developed by the managed care health plan, in consultation with their
stakeholders and consumers, to identify, within the earliest
possible timeframe, persons with higher risk and more complex health
care needs pursuant to paragraph (11) of subdivision (c).
(8) Provide managed care health plans with historical utilization
data for beneficiaries upon enrollment in a managed care health plan
so that the plans participating in the demonstration project are
better able to assist beneficiaries and prioritize assessment and
care planning.
(9) Develop and provide managed care health plans participating in
the demonstration project with a facility site review tool for use
in assessing the physical accessibility of providers, including
specialists and ancillary service providers that provide care to a
high volume of seniors and persons with disabilities, at a clinic or
provider site, to ensure that there are sufficient physically
accessible providers. Every managed care health plan participating in
the demonstration project shall make the results of the facility
site review tool publicly available on their Internet Web site and
shall regularly update the results to the department's satisfaction.
(10) Develop a process to enforce legal sanctions, including, but
not limited to, financial penalties, withholding of Medi-Cal
payments, enrollment termination, and contract termination, in order
to sanction any managed care health plan in the demonstration project
that consistently or repeatedly fails to meet performance standards
provided in statute or contract.
(11) Ensure that managed care health plans provide a mechanism for
enrollees to request a specialist or clinic as a primary care
provider. A specialist or clinic may serve as a primary care provider
if the specialist or clinic agrees to serve in a primary care
provider role and is qualified to treat the required range of
conditions of the enrollee.
(12) Ensure that managed care health plans participating in the
demonstration project are able to provide communication access to
seniors and persons with disabilities in alternative formats or
through other methods that ensure communication, including assistive
listening systems, sign language interpreters, captioning, pad and
pencil, plain language or written translations and oral interpreters,
including for those who are limited English-proficient, or
non-English speaking, and that all managed care health plans are in
compliance with applicable cultural and linguistic requirements.
(13) Ensure that managed care health plans participating in the
demonstration project provide access to out-of-network providers for
new individual members enrolled under this section who have an
ongoing relationship with a provider if the provider will accept the
health plan's rate for the service offered, or the applicable
Medi-Cal fee-for-service rate, whichever is higher, and the health
plan determines that the provider meets applicable professional
standards and has no disqualifying quality of care issues.
(14) Ensure that managed care health plans participating in the
demonstration project comply with continuity of care requirements in
Section 1373.96 of the Health and Safety Code.
(15) Ensure that the medical exemption criteria applied in
counties operating under Chapter 4.1 (commencing with Section 53800)
or Chapter 4.5 (commencing with Section 53900) of Subdivision 1 of
Division 3 of Title 22 of the California Code of Regulations are
applied to seniors and persons with disabilities served under this
section.
(16) Ensure that managed care health plans participating in the
demonstration project take into account the behavioral health needs
of enrollees and include behavioral health services as part of the
enrollee's care management plan when appropriate.
(17) Develop performance measures that are required as part of the
contract to provide quality indicators for the Medi-Cal population
enrolled in a managed care health plan and for the subset of
enrollees who are seniors and persons with disabilities. These
performance measures may include measures from the Healthcare
Effectiveness Data and Information Set (HEDIS) or measures indicative
of performance in serving special needs populations, such as the
National Committee for Quality Assurance (NCQA) Structure and Process
measures, or both.
(18) Conduct medical audit reviews of participating managed care
health plans that include elements specifically related to the care
of seniors and persons with disabilities. These medical audits shall
include, but not be limited to, evaluation of the delivery model's
policies and procedures, performance in utilization management,
continuity of care, availability and accessibility, member rights,
and quality management.
(19) Conduct financial audit reviews to ensure that a financial
statement audit is performed on managed care health plans annually
pursuant to the Generally Accepted Auditing Standards, and conduct
other risk-based audits for the purpose of detecting fraud and
irregular transactions.
(c) Prior to exercising its authority under this section and
Section 14180, the department shall ensure that each managed care
health plan participating in the demonstration project is able to do
all of the following:
(1) Comply with the applicable readiness evaluation criteria and
requirements set forth in paragraphs (1) to (8), inclusive, of
subdivision (b) of Section 14087.48.
(2) Ensure and monitor an appropriate provider network, including
primary care physicians, specialists, professional, allied, and
medical supportive personnel, and an adequate number of accessible
facilities within each service area. Managed care health plans shall
maintain an updated, accurate, and accessible listing of a provider's
ability to accept new patients and shall make it available to
enrollees, at a minimum, by phone, written material, or Internet Web
site.
(3) Assess the health care needs of beneficiaries who are seniors
or persons with disabilities and coordinate their care across all
settings, including coordination of necessary services within and,
where necessary, outside of the plan's provider network.
(4) Ensure that the provider network and informational materials
meet the linguistic and other special needs of seniors and persons
with disabilities, including providing information in an
understandable manner in plain language, maintaining toll-free
telephone lines, and offering member or ombudsperson services.
(5) Provide clear, timely, and fair processes for accepting and
acting upon complaints, grievances, and disenrollment requests,
including procedures for appealing decisions regarding coverage or
benefits. Each managed care health plan participating in the
demonstration project shall have a grievance process that complies
with Section 14450, and Sections 1368 and 1368.01 of the Health and
Safety Code.
(6) Solicit stakeholder and member participation in advisory
groups for the planning and development activities related to the
provision of services for seniors and persons with disabilities.
(7) Contract with safety net and traditional providers as defined
in subdivisions (hh) and (jj) of Section 53810, of Title 22 of the
California Code of Regulations, to ensure access to care and
services. The managed care health plan shall establish participation
standards to ensure participation and broad representation of
traditional and safety net providers within a service area.
(8) Inform seniors and persons with disabilities of procedures for
obtaining transportation services to service sites that are offered
by the plan or are available through the Medi-Cal program.
(9) Monitor the quality and appropriateness of care for children
with special health care needs, including children eligible for, or
enrolled in, the California Children Services Program, and seniors
and persons with disabilities.
(10) Maintain a dedicated liaison to coordinate with each regional
center operating within the plan's service area to assist members
with developmental disabilities in understanding and accessing
services and act as a central point of contact for questions, access
and care concerns, and problem resolution.
(11) At the time of enrollment apply the risk stratification
mechanism or algorithm described in paragraph (7) of subdivision (b)
approved by the department to determine the health risk level of
beneficiaries.
(12) (A) Managed health care plans shall assess an enrollee's
current health risk by administering a risk assessment survey tool
approved by the department. This risk assessment survey shall be
performed within the following timeframes:
(i) Within 45 days of plan enrollment for individuals determined
to be at higher risk pursuant to paragraph (11).
(ii) Within 105 days of plan enrollment for individuals determined
to be at lower risk pursuant to paragraph (11).
(B) Based on the results of the current health risk assessment,
managed care health plans shall develop individual care plans for
higher risk beneficiaries that shall include the following minimum
components:
(i) Identification of medical care needs, including primary care,
specialty care, durable medical equipment, medications, and other
needs with a plan for care coordination as needed.
(ii) Identification of needs and referral to appropriate community
resources and other agencies as needed for services outside the
scope of responsibility of the managed care health plan.
(iii) Appropriate involvement of caregivers.
(iv) Determination of timeframes for reassessment and, if
necessary, circumstances or conditions that require redetermination
of risk level.
(13) (A) Establish medical homes to which enrollees are assigned
that include, at a minimum, all of the following elements, which
shall be considered in the provider contracting process:
(i) A primary care physician who is the primary clinician for the
beneficiary and who provides core clinical management functions.
(ii) Care management and care coordination for the beneficiary
across the health care system including transitions among levels of
care.
(iii) Provision of referrals to qualified professionals, community
resources, or other agencies for services or items outside the scope
of responsibility of the managed care health plan.
(iv) Use of clinical data to identify beneficiaries at the care
site with chronic illness or other significant health issues.
(v) Timely preventive, acute, and chronic illness treatment in the
appropriate setting.
(vi) Use of clinical guidelines or other evidence-based medicine
when applicable for treatment of beneficiaries' health care issues or
timing of clinical preventive services.
(B) In implementing this section, and the terms and conditions of
the demonstration project, the department may alter the medical home
elements described in this paragraph as necessary to secure the
increased federal financial participation associated with the
provision of medical assistance in conjunction with a health home, as
made available under the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
codified in Section 1945 of Title XIX of the federal Social Security
Act. The department shall notify the appropriate policy and fiscal
committees of the Legislature of its intent to alter medical home
elements under this section at least five days in advance of taking
this action.
(14) Perform, at a minimum, the following care management and care
coordination functions and activities for enrollees who are seniors
or persons with disabilities:
(A) Assessment of each new enrollee's risk level and health needs
shall be conducted through a standardized risk assessment survey by
means such as telephonic, Web-based, or in-person communication or by
other means as determined by the department.
(B) Facilitation of timely access to primary care, specialty care,
durable medical equipment, medications, and other health services
needed by the enrollee, including referrals for any physical or
cognitive barriers to access.
(C) Active referral to community resources or other agencies for
needed services or items outside the managed care health plans
responsibilities.
(D) Facilitating communication among the beneficiaries' health
care providers, including mental health and substance abuse providers
when appropriate.
(E) Other activities or services needed to assist beneficiaries in
optimizing their health status, including assisting with
self-management skills or techniques, health education, and other
modalities to improve health status.
(d) Except in a county where Medi-Cal services are provided by a
county organized health system, and notwithstanding any other
provision of law, in any county in which fewer than two existing
managed care health plans contract with the department to provide
Medi-Cal services under this chapter, the department may contract
with additional managed care health plans to provide Medi-Cal
services for seniors and persons with disabilities and other Medi-Cal
beneficiaries.
(e) Beneficiaries enrolled in managed care health plans pursuant
to this section shall have the choice to continue an established
patient-provider relationship in a managed care health plan
participating in the demonstration project if his or her treating
provider is a primary care provider or clinic contracting with the
managed care health plan and agrees to continue to treat that
beneficiary.
(f) The department, or as applicable, the California Medical
Assistance Commission, may contract with existing managed care health
plans to operate under the demonstration project to provide or
arrange for services under this section. Notwithstanding any other
provision of law, the department, or as applicable, the commission,
may enter into the contract without the need for a competitive bid
process or other contract proposal process, provided the managed care
health plan provides written documentation that it meets all
qualifications and requirements of this section.
(g) This section shall be implemented only to the extent that
federal financial participation is available.
(h) (1) The development of capitation rates for managed care
health plan contracts shall include the analysis of data specific to
the seniors and persons with disabilities population. For the
purposes of developing capitation rates for payments to managed care
health plans, the director may require managed care health plans,
including existing managed health care plans, to submit financial and
utilization data in a form, time, and substance as deemed necessary
by the department.
(2) Notwithstanding Section 14301, the department may incorporate,
on a one-time basis for a three-year period, a risk sharing
mechanism in a contract with the local initiative health plan in the
county with the highest normalized fee-for-service risk score over
the normalized managed care risk score listed in Table 1.0 of the
Medi-Cal Acuity Study Seniors and Persons with Disabilities (SPD)
report written by Mercer Government Human Services Consulting and
dated September 28, 2010. The Legislature finds and declares that
this risk sharing mechanism will limit the risk of beneficial or
adverse effects associated with a contract to furnish services
pursuant to this section on an at-risk basis.
(i) Persons meeting participation requirements for the Program of
All-Inclusive Care for the Elderly (PACE) pursuant to Chapter 8.75
(commencing with Section 14590), may select a PACE plan if one is
available in that county.
(j) Persons meeting the participation requirements in effect on
January 1, 2010, for a Medi-Cal primary care case management (PCCM)
plan in operation on that date, may select that PCCM plan or a
successor health care plan that is licensed pursuant to the
Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and Safety
Code) to provide services within the same geographic area that the
PCCM plan served on January 1, 2010.
(k) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries. The department
shall notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.
(l) Consistent with state law that exempts Medi-Cal managed care
contracts from Chapter 2 (commencing with Section 10290) of Part 2 of
Division 2 of the Public Contract Code, and in order to achieve
maximum cost savings, the Legislature hereby determines that an
expedited contract process is necessary for contracts entered into or
amended pursuant to this section. The contracts and amendments
entered into or amended pursuant to this section shall be exempt from
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of
the Public Contract Code and the requirements of State
Administrative Management Manual Memo 03-10. The department shall
make the terms of a contract available to the public within 30 days
of the contract's effective date.
(m) In the event of a conflict between the terms and conditions of
the approved demonstration project, including any attachment
thereto, and any provision of this part, the terms and conditions
shall control. If the department identifies a specific provision of
this article that conflicts with a term or condition of the approved
waiver or demonstration project, or an attachment thereto, the term
or condition shall control, and the department shall so notify the
appropriate fiscal and policy committees of the Legislature within 15
business days.
(n) In the event of a conflict between the provisions of this
article and any other provision of this part, the provisions of this
article shall control.
(o) Any otherwise applicable provisions of this chapter, Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14500) not in conflict with this article or with the terms
and conditions of the demonstration project shall apply to this
section.
(p) To the extent that the director utilizes state plan amendments
or waivers to accomplish the purposes of this article in addition to
waivers granted under the demonstration project, the terms of the
state plan amendments or waivers shall control in the event of a
conflict with any provision of this part.
(q) (1) Enrollment of seniors and persons with disabilities into a
managed care health plan under this section shall be accomplished
using a phased-in process to be determined by the department and
shall not commence until necessary federal approvals have been
acquired or until June 1, 2011, whichever is later.
(2) Notwithstanding paragraph (1), and at the director's
discretion, enrollment in Los Angeles County of Seniors and persons
with disabilities may be phased-in over a 12-month period using a
geographic region method that is proposed by Los Angeles County
subject to approval by the department.
(r) A managed care health plan established pursuant to this
section, or under the terms and conditions of the demonstration
project pursuant to Section 14180, shall be subject to, and comply
with, the requirement for submission of encounter data specified in
Section 14182.1.
(s) (1) Commencing January 1, 2011, and until January 1, 2014, the
department shall provide the fiscal and policy committees of the
Legislature with semiannual updates regarding core activities for the
enrollment of seniors and persons with disabilities into managed
care health plans pursuant to the pilot program. The semiannual
updates shall include key milestones, progress towards the objectives
of the pilot program, relevant or necessary changes to the program,
submittal of state plan amendments to the federal Centers for
Medicare and Medicaid Services, submittal of any federal waiver
documents, and other key activities related to the mandatory
enrollment of seniors and persons with disabilities into managed care
health plans. The department shall also include updates on the
transition of individuals into managed care health plans, the health
outcomes of enrollees, the care management and coordination process,
and other information concerning the success or overall status of the
pilot program.
(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2015, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
(t) The department, in collaboration with the State Department of
Social Services and county welfare departments, shall monitor the
utilization and caseload of the In-Home Supportive Services (IHSS)
program before and during the implementation of the pilot program.
This information shall be monitored in order to identify the impact
of the pilot program on the IHSS program for the affected population.
(u) Services under Section 14132.95 or 14132.952, or Article 7
(commencing with Section 12300) of Chapter 3 that are provided to
individuals assigned to managed care health plans under this section
shall be provided through direct hiring of personnel, contract, or
establishment of a public authority or nonprofit consortium, in
accordance with and subject to the requirements of Section 12302 or
12301.6, as applicable.
(v) The department shall, at a minimum, monitor on a quarterly
basis the adequacy of provider networks of the managed care health
plans.
(w) The department shall suspend new enrollment of seniors and
persons with disabilities into a managed care health plan if it
determines that the managed care health plan does not have sufficient
primary or specialty providers to meet the needs of their enrollees.

14182.1. (a) Beginning March 2011, the department shall convene a
stakeholder workgroup to review the existing encounter, claims, and
financial data submission process required by the department under
managed care health plan contracts. The workgroup members shall be
selected by the department and shall include interested
representatives from Medi-Cal managed care health plans, managed care
health plan associations, hospitals, individual health care
providers, physician groups, and consumer representatives. In
reviewing the process, the department shall consider input from the
stakeholder workgroup and develop data quality submission standards
by October 2011.
(b) Beginning January 1, 2012, managed care health plans shall
comply with the quality submission standards developed pursuant to
subdivision (a) when submitting data to the department. The director
may impose a penalty for each month that a managed care health plan
fails to submit data in compliance with these standards. The penalty
shall be in proportion to that plan's failure to comply with the data
submission standards, as the director in his or her sole discretion
determines, and in no event shall the penalty exceed 2 percent of the
total monthly capitation rate for that plan or alternative model.
(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, interpret, or make specific this section by
means of all-county letters, plan letters, plan or provider
bulletins, or similar instructions, without taking regulatory action.
Prior to issuing any letter or similar instrument authorized
pursuant to this section, the department shall notify and consult
with stakeholders, including advocates, providers, and beneficiaries.
The department shall notify the appropriate policy and fiscal
committees of the Legislature of its intent to issue instructions
under this section at least five days in advance of the issuance. If
the department elects to adopt regulations, the adoption of
regulations shall be deemed an emergency and necessary for the
immediate preservation of the public peace, health and safety, or
general welfare.

14182.15. (a) It is the intent of the Legislature that, to the
extent that it does not jeopardize other federal funding and is
permitted by federal law, the intergovernmental transfers described
in this section provide support for the nonfederal share of
risk-based payments to managed care health plans to enable those
plans to compensate designated public hospitals in a sufficient
amount to preserve and strengthen the availability and quality of
services provided by those hospitals and their affiliated public
providers. It is further the intent of the Legislature that
transferring public entities elect to provide intergovernmental
transfers in an amount that is at least equivalent to the amount of
the nonfederal share that they would provide under fee-for-service,
as adjusted for utilization.
(b) (1) In conjunction with the implementation of Section 14182, a
public entity may elect to transfer public funds to the state to be
used solely as the nonfederal share of Medi-Cal payments to managed
care health plans for the provision of services to Medi-Cal
beneficiaries.
(2) For purposes of this section, "public entity" means a
designated public hospital as defined in subdivision (d) of Section
14166.1, the University of California, or a county or city and county
or local hospital authority that is licensed to operate one or more
of the designated public hospitals.
(c) If a public entity elects to make intergovernmental transfers
pursuant to this section, all of the following shall apply:
(1) To ensure that the implementation of Section 14182 does not
jeopardize the ability of designated public hospitals and their
affiliated public providers to continue serving Medi-Cal
beneficiaries, to the extent permitted under federal law, the
department shall require managed care health plans to pay the
designated public hospital and other governmental providers
affiliated with the transferring public entity for services rendered
to Medi-Cal beneficiaries, amounts that are no less than the amount
to which the providers would have otherwise been entitled, including
the federal and nonfederal share, on a fee-for-service basis, for the
full scope of Medi-Cal services, including supplemental payments and
any additional federally permissible amount. The payment amounts
required by this paragraph shall be based upon the volume of Medi-Cal
services provided by the designated public hospitals and other
governmental providers affiliated with the transferring public
entity.
(2) Except as provided in Section 14105.24, to the extent that the
payments described in paragraph (1) result in increased payments by
the managed care health plans to the designated public hospitals and
other governmental providers affiliated with the transferring public
entity that are the basis of increased rates paid by the department
to the managed care health plans above the amount that would have
been paid in the absence of paragraph (1), the nonfederal share of
the increased rates shall be borne by the transferring entity as
described in subdivision (d) and there shall be no additional impact
on state General Fund expenditures. Additionally, the payment rates
shall only be paid to the extent they can be certified as actuarially
sound and as permitted under federal law.
(d) The department shall meet and confer with the public entities
regarding their election to contribute to the nonfederal share of
federal Medicaid expenditures under this section and to determine
each public entity's intergovernmental transfer amount, which shall
be comprised of the following:
(1) An amount that is equivalent to the nonfederal share of the
rates of compensation the public entity's designated public hospital
would receive from managed care health plans, without regard to the
requirement of paragraph (1) of subdivision (c), for Medi-Cal
inpatient days of service that otherwise would have been rendered on
a fee-for-service basis in the absence of the implementation of
Section 14182 to Medi-Cal enrollees who are seniors and persons with
disabilities.
(2) An amount that is equivalent to the nonfederal share of the
amount which the designated public hospital and other governmental
providers affiliated with the transferring entity would have
otherwise incurred on a fee-for-service basis for providing Medi-Cal
services to the Medi-Cal managed care health plan enrollees they
serve, including supplemental payments, excluding the nonfederal
share of those amounts the plan will pay for the services without
regard to the requirement of paragraph (1) of subdivision (c), and
consistent with Section 14105.24, to the extent otherwise applicable.
(3) Amounts equivalent to the nonfederal share of additional
federally permissible payments.
(e) Prior to accepting the transfer amounts from a public entity
determined under subdivision (d), the department shall ensure that
its contracts with the applicable managed care health plans and the
contracts between the managed care health plans and the public
entities require, to the extent permitted under federal law, that the
managed care health plans pay the designated public hospitals, and
other governmental providers affiliated with the transferring
entities, amounts that are in furtherance of the intent of this
section as described in subdivision (a) and consistent with what the
designated public hospital and other governmental providers
affiliated with the transferring public entity would have received
through fee-for-service, and that the payment amounts meet the
requirement of paragraph (1) of subdivision (c).
(f) The department shall obtain federal approvals or waivers as
necessary to implement this section and to obtain federal matching
funds to the maximum extent permitted by federal law.
(g) Participation in intergovernmental transfers under this
section is voluntary on the part of the transferring entity for
purposes of all applicable federal laws. As part of its voluntary
participation in the nonfederal share of payments under this section
by means of intergovernmental transfers, the transferring entity
agrees to reimburse the state for the nonfederal share of state
staffing or administrative costs directly attributable to
implementation of this section. This section shall be implemented
only to the extent federal financial participation is not
jeopardized.

14182.2. (a) Notwithstanding Section 14094.3, in furtherance of the
waiver or demonstration project developed pursuant to Section 14180,
the director shall establish, by January 1, 2012, organized health
care delivery models for children eligible for California Children
Services (CCS) under Article 5 (commencing with Section 123800) of
Chapter 3 of Part 2 of Division 106 of the Health and Safety Code.
These models shall be chosen from the following:
(1) An enhanced primary care case management program.
(2) A provider-based accountable care organization.
(3) A specialty health care plan.
(4) A Medi-Cal managed care plan that includes payment and
coverage for CCS-eligible conditions.
(b) Each model shall do all of the following:
(1) Establish clear standards and criteria for participation,
exemption, enrollment, and disenrollment.
(2) Provide care coordination that links children and youth with
special health care needs with appropriate services and resources in
a coordinated manner to achieve optimum health.
(3) Establish networks that include CCS-approved providers and
maintain the current system of regionalized pediatric specialty and
subspecialty services to ensure that children and youth have timely
access to appropriate and qualified providers.
(4) Coordinate out-of-network access if appropriate and qualified
providers are not part of the network or in the region.
(5) Ensure that children enrolled in the model receive care for
their CCS-eligible medical conditions from CCS-approved providers
consistent with the CCS standards of care.
(6) Participate in a statewide quality improvement collaborative
that includes stakeholders.
(7) (A) Establish and support medical homes, incorporating all of
the following principles:
(i) Each child has a personal physician.
(ii) The medical home is a physician-directed medical practice.
(iii) The medical home utilizes a whole child orientation.
(iv) Care is coordinated or integrated across all of the elements
of the health care system and the family and child's community.
(v) Information, education, and support to consumers and families
in the program is provided in a culturally competent manner.
(vi) Quality and safety practices and measures.
(vii) Provides enhanced access to care, including access to
after-hours care.
(viii) Payment is structured appropriately to recognize the added
value provided to children and their families.
(B) In implementing this section, and the terms and conditions of
the demonstration project, the department may alter the medical home
principles described in this paragraph as necessary to secure the
increased federal financial participation associated with the
provision of medical assistance in conjunction with a health home, as
made available under the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
codified in Section 1945 of Title XIX of the federal Social Security
Act. The department shall notify the appropriate policy and fiscal
committees of the Legislature of its intent to alter medical home
principles under this section at least five days in advance of taking
this action.
(8) Provide the department with data for quality monitoring and
improvement measures, as determined necessary by the department. The
department shall institute quality monitoring and improvement
measures that are appropriate for children and youth with special
health care needs.
(c) The services provided under these models shall not be limited
to medically necessary services required to treat the CCS-eligible
medical condition.
(d) Notwithstanding any other provision of law, and to the extent
permitted by federal law, the department may require eligible
individuals to enroll in these models.
(e) At the election of the Managed Risk Medical Insurance Board,
and with the consent of the director, children enrolled in the
Healthy Families Program pursuant to Part 6.2 (commencing with
Section 12693) of Division 2 of the Insurance Code, who are eligible
for CCS under Article 5 (commencing with Section 123800) of Chapter 3
of Part 2 of Division 106 of the Health and Safety Code, may enroll
in the organized health care delivery models established under this
section.
(f) For the purposes of implementing this section, the department
shall seek proposals to establish and test these models of organized
health care delivery systems, may enter into exclusive or
nonexclusive contracts on a bid or negotiated basis, and may amend
existing managed care contracts to provide or arrange for services
under this section. 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.
(g) (1) Entities contracting with the department under this
section shall report expenditures for the services provided under the
contract.
(2) If a contractor is paid according to a capitated or risk-based
payment methodology, the rates shall be actuarially sound and take
into account care coordination activities.
(h) (1) The department shall conduct an evaluation to assess the
effectiveness of each model in improving the delivery of health care
services for children who are eligible for CCS. The department shall
consult with stakeholders in developing an evaluation for the models
being tested.
(2) The evaluation process shall begin simultaneously with the
development and implementation of the model delivery systems to
compare the care provided to, and outcomes of, children enrolled in
the models with those not enrolled in the models. The evaluation
shall include, at a minimum, an assessment of all of the following:
(A) The types of services and expenditures for services.
(B) Improvement in the coordination of care for children.
(C) Improvement in the quality of care.
(D) Improvement in the value of care provided.
(E) The rate of growth of expenditures.
(F) Parent satisfaction.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, the
department may implement, interpret, or make specific this section
and any applicable federal waivers and state plan amendments by means
of all-county letters, plan letters, plan or provider bulletins, or
similar instructions, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries. The department
shall notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.

14182.3. (a) To the extent the provisions of Article 5.2
(commencing with Section 14166) do not conflict with the provisions
of this article or the terms and conditions of the new demonstration
project created under this article, the provisions of Article 5.2
(commencing with Section 14166) shall continue to apply to the new
demonstration project.
(b) In the event of a conflict between any provision of this
article and the special terms and conditions required by the federal
Centers for Medicare and Medicaid Services for the approval of the
demonstration project described in Section 14180, the special terms
and conditions shall control.
(c) (1) Under the demonstration project described in Section
14180, the state shall have priority to claim against and retain the
first five hundred million dollars ($500,000,000) in federal funds
using expenditures incurred under state-only programs or other
programs for which the state is authorized to claim under the terms
and conditions of the demonstration project.
(2) Notwithstanding paragraph (1), if the director determines that
the amount of base funding available under the demonstration project
described in Section 14180 is less than the six hundred eighty-one
million six hundred forty thousand dollars ($681,640,000) available
to public hospitals under the original demonstration project, the
state may reallocate an amount from the five hundred million dollars
($500,000,000) described in paragraph (1) to increase the amount of
base funding under the new demonstration project to six hundred
eighty one million six hundred forty thousand dollars ($681,640,000).
(3) For purposes of this section, the term "base funding" includes
funding for the safety net care pool or a similar pool or fund for
health coverage expansion, and for an investment, incentive, or
similar pool, but shall not include funds made available to hospitals
or counties for inpatient or outpatient Medi-Cal reimbursements,
expansion of managed care for seniors and persons with disabilities,
or other expansions of systems of care for individuals who are
eligible under the Medi-Cal state plan.
(d) The director shall have authority to maximize available
federal financial participation under the demonstration project
described in Section 14180, including, but not limited to,
authorizing the use of intergovernmental transfers by district
hospitals that are not reimbursed under a contract negotiated
pursuant to the Selective Provider Contracting Program, to fund the
nonfederal share of expenditures to the extent permitted by the terms
and conditions of the demonstration project.
(e) Participation in intergovernmental transfers under this
section is voluntary on the part of the transferring entity for
purposes of all applicable federal laws. As part of its voluntary
participation in the nonfederal share of payments under this
subdivision by means of intergovernmental transfers, the transferring
entity agrees to reimburse the state for the nonfederal share of
state staffing or administrative costs directly attributable to the
state's implementation of these voluntary intergovernmental
transfers. This subdivision shall be implemented only to the extent
federal financial participation is not jeopardized.
(f) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may clarify, interpret, or
implement the provisions of this section by means of provider
bulletins or similar instructions. The department shall notify the
fiscal and appropriate policy committees of the Legislature of its
intent to issue instructions under this section at least five days in
advance of the issuance.

14182.4. (a) To the extent authorized under a federal waiver or
demonstration project described in Section 14180 that is approved by
the federal Centers for Medicare and Medicaid Services, the
department shall establish a program of investment, improvement, and
incentive payments for designated public hospitals to encourage and
incentivize delivery system transformation and innovation in
preparation for the implementation of federal health care reform.
(b) The Public Hospital Investment, Improvement, and Incentive
Fund is hereby established in the State Treasury. Notwithstanding
Section 13340 of the Government Code, moneys in the fund shall be
continuously appropriated, without regard to fiscal years, to the
department for the purposes specified in this section.
(c) The fund shall consist of any moneys that a county, other
political subdivision of the state, or other governmental entity in
the state that may elect to transfer to the department for deposit
into the fund, as permitted under Section 433.51 of Title 42 of the
Code of Federal Regulations or any other applicable federal Medicaid
laws.
(d) Moneys in the fund shall be used as the source for the
nonfederal share of investment, improvement, and incentive payments
as authorized under a federal waiver or demonstration project to
participating designated public hospitals defined in subdivision (d)
of Section 14166.1, and the governmental entities with which they are
affiliated, that provide the intergovernmental transfers for deposit
into the fund.
(e) The department shall obtain federal financial participation
for moneys in the fund to the full extent permitted by law. Moneys
shall be allocated from the fund by the department and matched by
federal funds in accordance with the terms and conditions of the
waiver or demonstration project. The moneys disbursed from the fund,
and all associated federal financial participation, shall be
distributed solely to the designated public hospitals and the
governmental entities with which they are affiliated.
(f) Participation under this section is voluntary on the part of
the county or other political subdivision for purposes of all
applicable federal laws. As part of its voluntary participation in
the nonfederal share of payments under this section, the county or
other political subdivision agrees to reimburse the state for the
nonfederal share of state staffing or administrative costs directly
attributable to implementation of this section. This section shall be
implemented only to the extent federal financial participation is
not jeopardized.
(g) Notwithstanding the rulemaking provisions of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, the department may clarify, interpret, or
implement the provisions of this section by means of provider
bulletins or similar instructions. The department shall notify the
fiscal and appropriate policy committees of the Legislature of its
intent to issue instructions under this section at least five days in
advance of the issuance.

14182.9. Notwithstanding 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 department may implement the provisions
of this article through all-county welfare director letters or
similar instruction, without taking regulatory action. Prior to
issuing any letter or similar instrument authorized pursuant to this
section, the department shall notify and consult with stakeholders,
including advocates, providers, and beneficiaries, in implementing,
interpreting, or making specific this article. The department shall
notify the appropriate policy and fiscal committees of the
Legislature of its intent to issue instructions under this section at
least five days in advance of the issuance.

14183.6. The department shall enter into an interagency agreement
with the Department of Managed Health Care to have the Department of
Managed Health Care, on behalf of the department, conduct financial
audits, medical surveys, and a review of the provider networks of the
managed care health plans participating in the demonstration
project. The interagency agreement shall be updated, as necessary, on
an annual basis in order to maintain functional clarity regarding
the roles and responsibilities of these core activities. The
department shall not delegate its authority under this division to
the Department of Managed Health Care.