California Legislature—2013–14 Regular Session

Assembly Bill No. 361

Introduced by Assembly Member Mitchell

February 14, 2013

An act to add Article 3.9 (commencing with Section 14127) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

AB 361, as introduced, Mitchell. Medi-Cal: Health Homes for Medi-Cal Enrollees and Section 1115 Waiver Demonstration Populations with Chronic and Complex Conditions.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes a state, subject to federal approval of a state plan amendment, to offer health home services, as defined, to eligible individuals with chronic conditions.

This bill would authorize the department, subject to federal approval, to create a health home program for enrollees with chronic conditions, as prescribed, as authorized under federal law. This bill would provide that those provisions shall not be implemented unless federal financial participation is available and additional General Fund moneys are not used to fund the administration and service costs, except as specified. This bill would require the department to ensure that an evaluation of the program is completed, if created by the department, and would require that the department submit a report to the appropriate policy and fiscal committees of the Legislature within 2 years after implementation of the program.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The Health Homes for Enrollees with Chronic Conditions
option (Health Homes option) under Section 2703 of the federal
Patient Protection and Affordable Care Act (Affordable Care Act)
(42 U.S.C. Sec. 1396w-4) offers an opportunity for California to
address chronic and complex health conditions, including social
determinants that lead to poor health outcomes and high costs
among Medi-Cal beneficiaries.

(b) For example, people who frequently use hospitals for reasons
that could have been avoided with more appropriate care incur
high Medi-Cal costs and suffer high rates of early morality due to
the complexity of their conditions and, often, their negative social
determinants of health. Frequent users have difficulties accessing
regular or preventive care and complying with treatment protocols,
and the significant number who are homeless have no place to
store medications, cannot adhere to a healthy diet or maintain
appropriate hygiene, face frequent victimization, and lack rest
when recovering from illness.

(c) Increasingly, health providers are partnering with community
behavioral health and social services providers to offer a
person-centered interdisciplinary system of care that effectively
addresses the needs of enrollees with multiple chronic or complex
conditions, including frequent hospital users and people
experiencing chronic homelessness. These health homes help
people with chronic and complex conditions to access better care
and better health, while decreasing costs.

(d) Federal guidelines allow the state to access enhanced federal
matching rates for health home services under the Health Homes
option for multiple target populations to achieve more than one
policy goal.

SEC. 2.  

Article 3.9 (commencing with Section 14127) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

 

Article 3.9.  Health Homes for Medi-Cal Enrollees and Section
1115 Waiver Demonstration Populations with Chronic and
Complex Conditions

 

14127.  

For the purposes of this article, the following definitions
shall apply:

(a) “Department” means the State Department of Health Care
Services.

(b) “Federal guidelines” means all federal statutes, and all
regulatory and policy guidelines issued by the federal Centers for
Medicare and Medicaid Services regarding the Health Homes for
Enrollees with Chronic Conditions option under Section 2703 of
the federal Patient Protection and Affordable Care Act (Affordable
Care Act) (42 U.S.C. Sec. 1396w-4), including the State Medicaid
Director Letter issued on November 16, 2010.

(c) (1) “Health home” means a provider or team of providers
designated by the department that satisfies all of the following:

(A) Meets the criteria described in federal guidelines.

(B) Offers a whole person approach, including, but not limited
to, coordinating other available services that address needs affecting
a participating individual’s health.

(C) Offers services in a range of settings, as appropriate, to meet
the needs of an individual eligible for health home services.

(2) Health home partners may include, but are not limited to, a
health plan, community clinic, a mental health plan, a hospital,
physicians, a clinical practice or clinical group practice, rural health
clinic, community health center, community mental health center,
home health agency, nurse practitioners, social workers,
paraprofessionals, housing navigators, and housing providers.

(3) For purposes of serving the population identified in Section
14127.3, the department shall require a lead provider to be a
community clinic, a mental health plan, a community-based
nonprofit organization, a county health system, or a hospital.

(4) The department may determine the model of health home
it intends to create, including any entity, provider, or group of
providers operating as a health team, as a team of health care
professionals, or as a designated provider, as those terms are
defined in Sections 3502(c)(2) and 1945(h)(5) and (h)(6) of the
Affordable Care Act, respectively.

(d) “Homeless” has the same meaning as that term is defined
in Section 91.5 of Title 24 of the Code of Federal Regulations. A
“chronically homeless individual” means an individual whose
conditions limit his or her activities of daily living and who has
experienced homelessness for longer than a year or for four or
more episodes over three years. An individual who is currently
residing in transitional housing or who has been residing in
permanent supportive housing for less than two years shall be
considered a chronically homeless individual if the individual was
chronically homeless prior to his or her residence.

14127.1.  

Subject to federal approval, the department may do
all of the following to create a California Health Home Program,
as authorized under Section 2703 of the Affordable Care Act:

(a) Design, with opportunity for public comment, a program to
provide health home services to Medi-Cal beneficiaries and Section
1115 waiver demonstration populations with chronic conditions.

(b) Contract with new providers, new managed care plans,
existing Medi-Cal providers, existing managed care plans, or
counties to provide health home services, as provided in Section
14128.

(c) Submit any necessary applications to the federal Centers for
Medicare and Medicaid Services for one or more state plan
amendments to provide health home services to Medi-Cal
beneficiaries, to newly eligible Medi-Cal beneficiaries upon
Medicaid expansion under the Affordable Care Act, and, if
applicable, to Low Income Health Program (LIHP) enrollees in
counties with LIHPs willing to match federal funds.

(d) Except as specified in Section 14127.3, define the
populations of eligible individuals.

(e) Develop a payment methodology, including, but not limited
to, fee-for-service or per member, per month payment structures
that include tiered payment rates that take into account the intensity
of services necessary to outreach to, engage, and serve the
populations the department identifies.

(f) Identify health home services, consistent with federal
guidelines.

(g) The department may submit applications and operate, to the
extent permitted by federal law and to the extent federal approval
is obtained, more than one health home program for distinct
populations, different providers or contractors, or specific
geographic areas.

14127.2.  

(a) The department may design one or more state
plan amendments to provide health home services to children and
adults pursuant to Section 14127.1, and, in consultation with
stakeholders, shall develop the geographic criteria, beneficiary
eligibility criteria, and provider eligibility criteria for each state
plan amendment.

(b) (1) Subject to federal approval for receipt of the enhanced
federal match, services provided under the program established
pursuant to this article shall include all of the following:

(A) Comprehensive and individualized care management.

(B) Care coordination and health promotion, including
connection to medical, mental health, and substance use care.

(C) Comprehensive transitional care from inpatient to other
settings, including appropriate followup.

(D) Individual and family support, including authorized
representatives.

(E) Referral to relevant community and social services supports,
including, but not limited to, connection to housing for participants
who are homeless or unstably housed, transportation to
appointments needed to managed health needs, and peer recovery
support.

(F) Health information technology to identify eligible individuals
and link services, if feasible and appropriate.

(2) According to beneficiary needs, the health home provider
may provide less intensive services or graduate the beneficiary
completely from the program upon stabilization.

(c) (1) The department shall design a health home program
with specific elements to engage and serve eligible individuals,
and health home program outreach and enrollment shall specifically
focus on these populations.

(2) The department shall design program elements, including
provider rates specific to eligible populations defined by the
department pursuant to subdivision (d) of Section 14127.1 and
targeted beneficiaries described in Section 14127.3, if applicable,
after consultation with stakeholder groups who have expertise in
engagement and services for those individuals. The department
shall design the health home program with specific elements to
engage and serve these populations, and these populations shall
be a specific focus for health home program outreach and
enrollment.

14127.3.  

(a) If the department creates a health home program
pursuant to this article, the department shall determine whether a
health home program that targets adults is operationally viable.

(b) (1) In determining whether a health home program that
targets adults is operationally viable, the department shall consider
whether a state plan amendment could be designed in a manner
that minimizes the impact on the General Fund, whether the
department has the capacity to administer the program, and whether
a sufficient provider network exists for providing health home
services to the population described in this section.

(2) If the department determines that a health home program
that targets adults is operationally viable pursuant to paragraph
(1), then the department shall design a state plan amendment to
target beneficiaries who meet the criteria specified in subdivision
(c).

(3) (A) If the department determines a health home program
that targets adults is not operationally viable, then the department
shall report the basis for this determination, as well as a plan to
address the needs of the chronically homeless and frequent hospital
users to the appropriate policy and fiscal committees of the
Legislature.

(B) The requirement for submitting the report and plan under
subparagraph (A) is inoperative four years after the date the report
is due, pursuant to Section 10231.5 of the Government Code.

(c) A state plan amendment designed pursuant to this section
shall target beneficiaries who meet both of the following criteria:

(1) Have current diagnoses of chronic, cooccurring physical
health, mental health, or substance use disorders prevalent among
frequent hospital users at an acuity level to be determined by the
department.

(2) Have one or more of the following indicators of severity, at
a level to be determined by the department:

(A) Frequent inpatient hospital admissions, including
hospitalization for medical, psychiatric, or substance use related
conditions.

(B) Excessive use of crisis or emergency services.

(C) Chronic homelessness.

(d) (1) For the purposes of providing health home services to
targeted beneficiaries who meet the criteria in subdivision (c), the
department shall select designated health home providers, managed
care organizations subcontracting with providers, or counties acting
as or subcontracting with providers operating as a health home
team that have all of the following:

(A) Demonstrated experience working with frequent hospital
users.

(B) Demonstrated experience working with people who are
chronically homeless.

(C) The capacity and administrative infrastructure to participate
in the program, including the ability to meet requirements of federal
guidelines.

(D) A viable plan, with roles identified among providers of the
health home, to do all of the following:

(i) Reach out to and engage frequent hospital users and
chronically homeless eligible individuals.

(ii) Link eligible individuals who are homeless or experiencing
housing instability to permanent housing, such as supportive
housing.

(iii) Ensure coordination and linkages to services needed to
access and maintain health stability, including medical, mental
health, substance use care, and social services to address social
determinants of health.

(2) The department may design additional provider criteria to
those identified in paragraph (1) after consultation with stakeholder
groups who have expertise in engagement and services for targeted
beneficiaries described in this section.

(3) The department may authorize health home providers eligible
under this subdivision to serve Medi-Cal enrollees through a
fee-for-service or managed care delivery system, and shall allow
for both county-operated and private providers to participate in
the California Health Home program.

14127.4.  

(a) The department shall administer this article in a
manner that attempts to maximize federal financial participation,
consistent with federal law.

(b) This article shall not be construed to preclude local
governments or foundations from contributing the nonfederal share
of costs for services provided under this program, so long as those
contributions are permitted under federal law. The department, or
counties contracting with the department, may also enter into
risk-sharing and social impact bond program agreements to fund
services under this article.

(c) In accordance with federal guidelines, the state may limit
availability of health home or enhanced health home services
geographically.

14127.5.  

(a) If the department creates a health home program,
the department shall ensure that an evaluation of the program is
completed and shall, within two years after implementation, submit
a report to the appropriate policy and fiscal committees of the
Legislature.

(b) The requirement for submitting the report under subdivision
(a) is inoperative four years after the date the report is due, pursuant
to Section 10231.5 of the Government Code.

14127.6.  

(a) This article shall be implemented only if and to
the extent federal financial participation is available and the federal
Centers for Medicare and Medicaid Services approves any state
plan amendments sought pursuant to this article.

(b) Except as provided in subdivisions (c) and (d), this article
shall be implemented only if no additional General Fund moneys
are used to fund the administration and costs of services.

(c) Notwithstanding subdivision (b), prior to and during the first
eight quarters of implementation, if the department projects, based
on analysis of current and projected expenditures for health home
services, that this article can be implemented in a manner that does
not result in a net increase in ongoing General Fund costs for the
Medi-Cal program, the department may use state funds to fund
any program costs.

(d) Notwithstanding subdivision (b), if the department projects,
after the first eight quarters of implementation, that implementation
of this article has not resulted in a net increase in ongoing General
Fund costs for the Medi-Cal program, the department may use
state funds to fund any program costs.

(e) The department may use new funding in the form of
enhanced federal financial participation for health home services
that are currently funded to fund any additional costs for new health
home program services.

(f) The department shall seek to fund the creation,
implementation, and administration of the program with funding
other than state general funds.

(g) The department may revise or terminate the health home
program any time after the first eight quarters of implementation
if the department finds that the program fails to result in improved
health outcomes or results in substantial General Fund expense
without commensurate decreases in Medi-Cal costs among program
participants.

14128.  

(a) In the event of a judicial challenge of the provisions
of this article, this article shall not be construed to create an
obligation on the part of the state to fund any payment from state
funds due to the absence or shortfall of federal funding.

(b) For the purposes of implementing this article, the department
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 article. 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, and shall be exempt from the review or
approval of any division of the Department of General Services.

(c) (1) 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 the
process set forth in this article by means of all-county letters, plan
letters, plan or provider bulletins, or similar instructions, without
taking regulatory action, until such time as regulations are adopted.
It is the intent of the Legislature that the department be provided
temporary authority as necessary to implement program changes
until completion of the regulatory process.

(2) The department shall adopt emergency regulations no later
than two years after implementation of this article. The department
may readopt, up to two times, any emergency regulation authorized
by this section that is the same as or substantially equivalent to an
emergency regulation previously adopted pursuant to this section.

(3) The initial adoption of emergency regulations implementing
this article and the readoptions of emergency regulations authorized
by this section shall be deemed an emergency and necessary for
the immediate preservation of the public peace, health, safety, or
general welfare. Initial emergency regulations and readoptions
authorized by this section shall be exempt from review by the
Office of Administrative Law. The initial emergency regulations
and readoptions authorized by this section shall be submitted to
the Office of Administrative Law for filing with the Secretary of
State and shall remain in effect for no more than 180 days, by
which time final regulations may be adopted.