SECTIONS 14490-14499.6 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14490-14499.6

14490. In providing benefits under this chapter and Chapter 7
(commencing with Section 14000), the director shall aggressively seek
the development of alternative forms of financing and delivering
health care services. In carrying out the intent of this article, the
director shall contract with institutional providers, counties, or
other organizations to establish pilot programs that demonstrate the
value, or lack thereof, of such a program in delivering or financing
health care services in such a manner. Each pilot program shall be
for a specified duration not to exceed five years, and each pilot
program shall be evaluated annually for its efficiency,
effectiveness, and quality.
Upon a finding by the director that a pilot program contributes
substantially to the availability of high quality health services and
that those services are cost-effective, the director shall enter
into a contract for a period of up to five years.
Where the director recommends implementation of a pilot program on
a permanent basis, but finds that he or she is not able to implement
on a permanent basis that program immediately upon conclusion of the
program's term, he or she may extend the duration of the pilot
program until the evaluation or permanent implementation can be
accomplished. The extension shall be for a term not in excess of one
year, but may be renewed for additional one-year terms, provided that
the director has completed an evaluation to include findings that
would qualify an extension.

14491. The director shall pursue the feasibility of establishing
the following as pilot programs:
(a) A capitated, risk-assuming contract with one or more regional
fiscal intermediaries.
(b) A capitated, risk-assuming contract with acute care hospitals
within a county or region.
(c) A capitated, risk-assuming contract with one or more
organizations which provide payment to a specified class or classes
of providers.
For purposes of this section, "risk-assuming" means the pilot
program contractor agrees to assume the risk of utilization of
services or costs of services, or both.

14493. The director shall also consider programs which demonstrate
an innovative and economical use of health personnel and are approved
pursuant to Article 18 (commencing with Section 429.70), Chapter 2,
Part 1, Division 1 of the Health and Safety Code.

14494. The director may enter into other contracts under this
article which do one or more of the following:
(a) Demonstrate an innovative and economical use of health
personnel.
(b) Emphasize preventive care.
(c) Stress new methods for controlling utilization of services.
(d) Stress new methods of reviewing provider competency or quality
of care.
(e) Stress a more economical organization of health care resources
and delivery systems.
(f) Provide an incentive to beneficiaries to seek the most
economical level of care.
(g) Demonstrate innovative methods for health care financing, such
as prospective budgeting in regard to enrolled population or volume
of services.
(h) Test or demonstrate the feasibility of allowing California
citizens to purchase Medi-Cal coverage at a premium rate determined
by the department on an actuarial basis.

14495. In establishing pilot programs, the director may do the
following:
(a) Provide benefits based on class of recipient, class of
benefit, geographical area, or any other reasonable classification.
(b) Modify, to the extent permitted by federal law, the scope and
duration of benefits provided by Section 14132. The extent of
coverage may be limited to a fixed number of days or to amount or
duration of services.
(c) Modify, to the extent permitted by federal law, Medi-Cal
eligibility determination processes or criteria.
(d) Allow for the provision of Medi-Cal benefits on a prepaid
basis in a given geographical area exclusively by the pilot program.
(e) Assign persons eligible for Medi-Cal benefits to a pilot
program or a prepaid health plan on a pilot basis, provided such
persons shall be entitled to disenroll for any cause for a period of
30 days following the effective date of enrollment and to receive a
Medi-Cal card pursuant to Section 14017.

14495.10. (a) The department shall establish a pilot program to
provide continuous skilled nursing care as a benefit of the Medi-Cal
program, when those services are provided in accordance with an
approved federal waiver meeting the requirements of subdivision (b).
"Continuous skilled nursing care" means medically necessary care
provided by, or under the supervision of, a registered nurse within
his or her scope of practice, seven days a week, 24 hours per day, in
a health facility participating in the pilot program. This care
shall include a minimum of eight hours per day provided by or under
the direct supervision of a registered nurse. Each health facility
providing continuous skilled nursing care in the pilot program shall
have a minimum of one registered nurse or one licensed vocational
nurse awake and in the facility at all times.
(b) The department shall submit to the federal Centers for
Medicare and Medicaid Services, no later than April 1, 2000, a
federal waiver request developed in consultation with the State
Department of Developmental Services and the Association of Regional
Center Agencies, pursuant to Section 1915(b) of the federal Social
Security Act (42 U.S.C. Sec. 1396n(c)) to provide continuous skilled
nursing care services under the pilot program.
(c) (1) The pilot program shall be conducted to explore more
flexible models of health facility licensure to provide continuous
skilled nursing care to developmentally disabled individuals in the
least restrictive health facility setting, and to evaluate the effect
of the pilot program on the health, safety, and quality of life of
individuals, and the cost-effectiveness of this care. The evaluation
shall include a review of the pilot program by an independent agency.
(2) Participation in the pilot program shall include 10 health
facilities provided that the facilities meet all eligibility
requirements. The facilities shall be approved by the department, in
consultation with the State Department of Developmental Services and
the appropriate regional center agencies, and shall meet the
requirements of subdivision (e). Priority shall be given to
facilities with four to six beds, to the extent those facilities meet
all other eligibility requirements.
(d) Under the pilot program established in this section, a
developmentally disabled individual is eligible to receive continuous
skilled nursing care if all of the following conditions are met:
(1) The developmentally disabled individual meets the criteria as
specified in the federal waiver.
(2) The developmentally disabled individual resides in a health
facility that meets the provider participation criteria as specified
in the federal waiver.
(3) The continuous skilled nursing care services are provided in
accordance with the federal waiver.
(4) The continuous skilled nursing care services provided to the
developmentally disabled individual do not result in costs that
exceed the fiscal limit established in the federal waiver.
(e) A health facility seeking to participate in the pilot program
shall provide care for developmentally disabled individuals who
require the availability of continuous skilled nursing care, in
accordance with the terms of the pilot program. During participation
in the pilot program, the health facility shall comply with all the
terms and conditions of the federal waiver described in subdivision
(b), and shall not be subject to licensure or inspection under
Chapter 2 (commencing with Section 1250) of Division 2 of the Health
and Safety Code. Upon termination of the pilot program and
verification of compliance with Section 1265 of the Health and Safety
Code, the department shall immediately reinstate the participating
health facility's previous license for the balance of time remaining
on the license when the health facility began participation in the
pilot program.
(f) The department shall implement this pilot program only to the
extent it can demonstrate fiscal neutrality, as required under the
terms of the federal waiver, and only if the department has obtained
the necessary approvals to implement the pilot program and receives
federal financial participation from the federal Centers for Medicare
and Medicaid Services.
(g) In implementing this article, the department may enter into
contracts for the provision of essential administration and other
services. Contracts entered into under this section may be on a
noncompetitive bid basis and shall be exempt from the requirements of
Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of
the Public Contract Code.
(h) This section shall be repealed if and when the federal Centers
for Medicare and Medicaid Services approve a federal waiver pursuant
to Section 1915(c) of the federal Social Security Act (42 U.S.C.
Sec. 1396n(c)) or approve a state plan amendment to make this pilot
program a permanent program. If the federal Centers for Medicare and
Medicaid Services provide that approval, the Director of Health Care
Services shall execute a declaration stating that this approval has
been granted. The director shall retain the declaration and this
section shall be repealed on the date that the director executes a
declaration pursuant to this subdivision.

14496. (a) Alternate methods of payment for a pilot program may
include, but shall not be limited to, a prospectively negotiated
reimbursement rate, fee-for-service, retainer, capitation, or other
basis.
(b) In order to implement expeditiously the budgeting decisions of
the Legislature, the director shall, to the extent permitted by
federal law, adopt regulations setting rates payable to providers
which reflect such decisions 30 days after the enactment of the
Budget Act and of any other appropriation which changes the level of
funding for Medi-Cal services. The proposed regulations shall be
submitted to the Department of Finance five days prior to the date of
adoption. With the written approval of the Department of Finance,
the director shall adopt such regulations as emergency regulations in
accordance with the provisions of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340), Part 1, Division 3,
Title 2 of the Government Code). For purposes of such act, the
adoption of such regulations shall be deemed an emergency and
necessary for the immediate preservation of the public peace, health,
and safety or general welfare.
(c) In order to implement expeditiously the budgeting decisions of
the Legislature, the director and the contractor shall, to the
extent permitted by federal law, amend the pilot project contract to
reflect such decisions 60 days after the enactment of the Budget Act
and of any other appropriation which changes the level of funding for
Medi-Cal services. Any approvals, ratifications, reviews, or
analyses of such amendments required to be undertaken by any state
agency or state department shall be completed within the 60-day
period specified in this subdivision.

14497. The director shall call a public hearing pursuant to Section
14300 prior to entering into or renewing a pilot program. The
director shall make available to the public a statement of
objectives, program proposal, pilot program contract, and other
details regarding the pilot program not less than five days prior to
the public hearing.

14499.5. (a) (1) In carrying out the intent of this article, the
director shall contract for the operation of one local pilot program.
Special consideration shall be given to approving a program
contracted through county government in Santa Barbara County.
(2) Notwithstanding the limitations contained in Section 14490,
the director may enter into, or extend, contracts with the local
pilot program in Santa Barbara County pursuant to paragraph (1) for
periods that do not exceed three years.
(b) The establishment of a pilot program pursuant to this section
shall be contingent upon the availability of state and federal
funding. The program shall include the following components:
(1) Local authority for administration, fiscal management, and
delivery of services, but not including eligibility determination.
(2) Physician case management.
(3) Cost containment through provider incentives and other means.
(c) The program for the pilot project shall include a plan and
budget for delivery of services, administration, and evaluation.
During the first year of the pilot program, the amount of the state
contract shall equal 95 percent of total projected Medi-Cal
expenditures for delivery of services and for administration based on
fee-for-service conditions in the program county. During the
remaining years of the pilot project Medi-Cal expenditures in the
program county shall be no more than 100 percent of total projected
expenditures for delivery of services and for administration based on
any combination of the following paragraphs:
(1) Relevant prior fee-for-service Medi-Cal experience in the
program county.
(2) The fee-for-service Medi-Cal experience in comparable counties
or groups of counties.
(3) Medi-Cal experience of the pilot project in the program county
if, as determined by the department, the scope, level, and duration
of, and expenditures for, any services used in setting the rates
under this paragraph would be comparable to fee-for-service
conditions were they to exist in the program county and would be more
actuarially reliable for use in ratesetting than data available for
use in applying paragraph (1) or (2).
The projected total expenditure shall be determined annually
according to an acceptable actuarial process. The data elements used
by the department shall be shared with the proposed contractor.
(d) The director shall accept or reject the proposal within 30
days after the date of receipt. If a decision is made to reject the
proposal, the director shall set forth the reasons for this decision
in writing. Upon approval of the proposal, a contract shall be
written within 60 days. After signature by the local contractor, the
State Department of Health Care Services and the Department of
General Services shall execute the contract within 60 days.
(e) The director shall seek the necessary state and federal
waivers to enable operation of the program. If the federal waivers
for delivery of services under this plan are not granted, the
department is under no obligation to contract for implementation of
the program.
(f) For purposes of Section 1343 of the Health and Safety Code,
the Santa Barbara Regional Health Authority shall be considered to be
a county-operated pilot program contracting with the State
Department of Health Care Services pursuant to this article, and
notwithstanding any other provision of law, during the period that
this contract is in effect, the contractor shall be exempt from the
provisions of 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, relative to the services provided to Medi-Cal
beneficiaries under the terms and provisions of the pilot program.
(g) Dental services may be included within the services provided
in this pilot program.
(h) Any federal demonstration funding for this pilot program shall
be made available to the county within 60 days upon notification of
the award without the state retaining any portion not previously
specified in the grant application as submitted.
(i) (1) (A) The department may negotiate exclusive contracts and
rates with the Santa Barbara Regional Health Authority in the
implementation of this section.
(B) Contracts entered into under this article 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.
(C) The department shall enter into contracts pursuant to this
article, and shall be bound by the terms and conditions related to
the rates negotiated by the negotiator.
(2) The department shall implement this subdivision to the extent
that the following apply:
(A) Its implementation does not revise the status of the pilot
program as a federal demonstration project.
(B) Existing federal waivers apply to the pilot program as revised
by this subdivision, or the federal government extends the
applicability of the existing federal waivers or authorizes
additional federal waivers for the implementation of the program.
(3) The implementation of this subdivision shall not affect the
pilot program's having met any of the requirements of Part 3.5
(commencing with Section 1175) of Division 1 of the Health and Safety
Code and this division applicable to the pilot program with respect
to the negotiations of contracts and rates by the department.

14499.6. (a) The Santa Barbara Regional Health Authority may
arrange with out-of-county Selective Provider Contracting Program
hospitals that have negotiated hospital contracts and per diem rates
under Article 5.1 (commencing with Section 14165) of Chapter 7, to
provide medically justified emergency services or to provide
specialized hospital services not available within Santa Barbara
County to Medi-Cal beneficiaries who reside in Santa Barbara County.
The authority may arrange medically justified inpatient hospital
services with out-of-county program hospitals for those beneficiaries
whose county of residence for purposes of eligibility determination
is Santa Barbara, but who for medical or legal reasons physically
reside in a county other than Santa Barbara.
(b) The out-of-county program hospitals shall not charge the
authority more than their program negotiated rates when providing
hospital services to authority patients under this section, except as
provided in subdivision (c).
(c) In cases where an out-of-county program hospital can
demonstrate that the cost of the services it is rendering to
authority patients was not contemplated in the case mix and acuity
assumptions on which the program rates are based, the program
hospital and the authority shall negotiate in good faith equitable
rates for payment for the provision of hospital services to authority
patients. The established program rate shall serve as the base for
those negotiations.
(d) (1) Notwithstanding any other provision of law, any records
maintained by the authority which would enable a determination to be
made regarding rates negotiated pursuant to Article 5.1 (commencing
with Section 14165) of Chapter 7, shall be exempt from the Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code).
(2) The authority shall establish guidelines to ensure that these
rates are maintained as confidential records and that access to these
records is restricted.
(3) The authority shall submit the established guidelines to the
department for approval.