California Legislature—2015–16 Regular Session

Assembly BillNo. 690

Introduced by Assembly Member Wood

February 25, 2015

An act to amend Section 14132.100 of the Welfare and Institutions Code, relating to Medi-Cal.


AB 690, as introduced, Wood. Medi-Cal: federally qualified health centers: rural health clinics.

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 law provides that federally qualified health center services and rural health clinic services, as defined, are covered benefits under the Medi-Cal program, to be reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis. “Visit” is defined as a face-to-face encounter between a patient of a federally qualified health center or a rural health clinic and specified health care professionals.

This bill would include a marriage and family therapist within those health care professionals covered under that definition.

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

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

P2    1


Section 14132.100 of the Welfare and Institutions
is amended to read:



(a) The federally qualified health center services
4described in Section 1396d(a)(2)(C) of Title 42 of the United States
5Code are covered benefits.

6(b) The rural health clinic services described in Section
71396d(a)(2)(B) of Title 42 of the United States Code are covered

9(c) Federally qualified health center services and rural health
10clinic services shall be reimbursed on a per-visit basis in
11accordance with the definition of “visit” set forth in subdivision

13(d) Effective October 1, 2004, and on each October 1, thereafter,
14until no longer required by federal law, federally qualified health
15center (FQHC) and rural health clinic (RHC) per-visit rates shall
16be increased by the Medicare Economic Index applicable to
17primary care services in the manner provided for in Section
181396a(bb)(3)(A) of Title 42 of the United States Code. Prior to
19January 1, 2004, FQHC and RHC per-visit rates shall be adjusted
20by the Medicare Economic Index in accordance with the
21methodology set forth in the state plan in effect on October 1,

23(e) (1) An FQHC or RHC may apply for an adjustment to its
24per-visit rate based on a change in the scope of services provided
25by the FQHC or RHC. Rate changes based on a change in the
26scope of services provided by an FQHC or RHC shall be evaluated
27in accordance with Medicare reasonable cost principles, as set
28forth in Part 413 (commencing with Section 413.1) of Title 42 of
29the Code of Federal Regulations, or its successor.

30(2) Subject to the conditions set forth in subparagraphs (A) to
31(D), inclusive, of paragraph (3), a change in scope of service means
32any of the following:

33(A) The addition of a new FQHC or RHC service that is not
34incorporated in the baseline prospective payment system (PPS)
35rate, or a deletion of an FQHC or RHC service that is incorporated
36in the baseline PPS rate.

37(B) A change in service due to amended regulatory requirements
38or rules.

P3    1(C) A change in service resulting from relocating or remodeling
2an FQHC or RHC.

3(D) A change in types of services due to a change in applicable
4technology and medical practice utilized by the center or clinic.

5(E) An increase in service intensity attributable to changes in
6the types of patients served, including, but not limited to,
7populations with HIV or AIDS, or other chronic diseases, or
8homeless, elderly, migrant, or other special populations.

9(F) Any changes in any of the services described in subdivision
10(a) or (b), or in the provider mix of an FQHC or RHC or one of
11its sites.

12(G) Changes in operating costs attributable to capital
13expenditures associated with a modification of the scope of any
14of the services described in subdivision (a) or (b), including new
15or expanded service facilities, regulatory compliance, or changes
16in technology or medical practices at the center or clinic.

17(H) Indirect medical education adjustments and a direct graduate
18medical education payment that reflects the costs of providing
19teaching services to interns and residents.

20(I) Any changes in the scope of a project approved by the federal
21Health Resources andbegin delete Serviceend deletebegin insert Servicesend insert Administration (HRSA).

22(3) No change in costs shall, in and of itself, be considered a
23scope-of-service change unless all of the following apply:

24(A) The increase or decrease in cost is attributable to an increase
25or decrease in the scope of services defined in subdivisions (a) and
26(b), as applicable.

27(B) The cost is allowable under Medicare reasonable cost
28principles set forth in Part 413 (commencing with Section 413) of
29Subchapter B of Chapter 4 of Title 42 of the Code of Federal
30Regulations, or its successor.

31(C) The change in the scope of services is a change in the type,
32intensity, duration, or amount of services, or any combination

34(D) The net change in the FQHC’s or RHC’s rate equals or
35exceeds 1.75 percent for the affected FQHC or RHC site. For
36FQHCs and RHCs that filed consolidated cost reports for multiple
37sites to establish the initial prospective payment reimbursement
38rate, the 1.75-percent threshold shall be applied to the average
39per-visit rate of all sites for the purposes of calculating the cost
40associated with a scope-of-service change. “Net change” means
P4    1the per-visit rate change attributable to the cumulative effect of all
2increases and decreases for a particular fiscal year.

3(4) An FQHC or RHC may submit requests for scope-of-service
4changes once per fiscal year, only within 90 days following the
5beginning of the FQHC’s or RHC’s fiscal year. Any approved
6increase or decrease in the provider’s rate shall be retroactive to
7the beginning of the FQHC’s or RHC’s fiscal year in which the
8request is submitted.

9(5) An FQHC or RHC shall submit a scope-of-service rate
10change request within 90 days of the beginning of any FQHC or
11RHC fiscal year occurring after the effective date of this section,
12if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or
13RHC experienced a decrease in the scope of services provided that
14the FQHC or RHC either knew or should have known would have
15resulted in a significantly lower per-visit rate. If an FQHC or RHC
16discontinues providing onsite pharmacy or dental services, it shall
17submit a scope-of-service rate change request within 90 days of
18the beginning of the following fiscal year. The rate change shall
19be effective as provided for in paragraph (4). As used in this
20paragraph, “significantly lower” means an average per-visit rate
21decrease in excess of 2.5 percent.

22(6) Notwithstanding paragraph (4), if the approved
23scope-of-service change or changes were initially implemented
24on or after the first day of an FQHC’s or RHC’s fiscal year ending
25in calendar year 2001, but before the adoption and issuance of
26written instructions for applying for a scope-of-service change,
27the adjusted reimbursement rate for that scope-of-service change
28shall be made retroactive to the date the scope-of-service change
29was initially implemented. Scope-of-service changes under this
30paragraph shall be required to be submitted within the later of 150
31days after the adoption and issuance of the written instructions by
32the department, or 150 days after the end of the FQHC’s or RHC’s
33fiscal year ending in 2003.

34(7) All references in this subdivision to “fiscal year” shall be
35construed to be references to the fiscal year of the individual FQHC
36or RHC, as the case may be.

37(f) (1) An FQHC or RHC may request a supplemental payment
38if extraordinary circumstances beyond the control of the FQHC
39or RHC occur after December 31, 2001, and PPS payments are
40insufficient due to these extraordinary circumstances. Supplemental
P5    1payments arising from extraordinary circumstances under this
2subdivision shall be solely and exclusively within the discretion
3of the department and shall not be subject to subdivision (l). These
4supplemental payments shall be determined separately from the
5scope-of-service adjustments described in subdivision (e).
6Extraordinary circumstances include, but are not limited to, acts
7of nature, changes in applicable requirements in the Health and
8Safety Code, changes in applicable licensure requirements, and
9changes in applicable rules or regulations. Mere inflation of costs
10 alone, absent extraordinary circumstances, shall not be grounds
11for supplemental payment. If an FQHC’s or RHC’s PPS rate is
12sufficient to cover its overall costs, including those associated with
13the extraordinary circumstances, then a supplemental payment is
14not warranted.

15(2) The department shall accept requests for supplemental
16payment at any time throughout the prospective payment rate year.

17(3) Requests for supplemental payments shall be submitted in
18writing to the department and shall set forth the reasons for the
19request. Each request shall be accompanied by sufficient
20documentation to enable the department to act upon the request.
21Documentation shall include the data necessary to demonstrate
22that the circumstances for which supplemental payment is requested
23meet the requirements set forth in this section. Documentation
24shall include all of the following:

25(A) A presentation of data to demonstrate reasons for the
26FQHC’s or RHC’s request for a supplemental payment.

27(B) Documentation showing the cost implications. The cost
28impact shall be material and significant, two hundred thousand
29dollars ($200,000) or 1 percent of a facility’s total costs, whichever
30is less.

31(4) A request shall be submitted for each affected year.

32(5) Amounts granted for supplemental payment requests shall
33be paid as lump-sum amounts for those years and not as revised
34PPS rates, and shall be repaid by the FQHC or RHC to the extent
35that it is not expended for the specified purposes.

36(6) The department shall notify the provider of the department’s
37discretionary decision in writing.

38(g) (1) An FQHC or RHC “visit” means a face-to-face
39encounter between an FQHC or RHC patient and a physician,
40physician assistant, nurse practitioner, certified nurse-midwife,
P6    1clinical psychologist, licensed clinical social worker,begin insert marriage
2and family therapist,end insert
or a visiting nurse. For purposes of this
3section, “physician” shall be interpreted in a manner consistent
4with the Centers for Medicare and Medicaid Services’ Medicare
5Rural Health Clinic and Federally Qualified Health Center Manual
6(Publication 27), or its successor, only to the extent that it defines
7the professionals whose services are reimbursable on a per-visit
8basis and not as to the types of services that these professionals
9may render during these visits and shall include a physician and
10surgeon, podiatrist, dentist, optometrist, and chiropractor. A visit
11shall also include a face-to-face encounter between an FQHC or
12RHC patient and a comprehensive perinatal services practitioner,
13as defined in Section 51179.1 of Title 22 of the California Code
14of Regulations, providing comprehensive perinatal services, a
15four-hour day of attendance at an adult day health care center, and
16any other provider identified in the state plan’s definition of an
17FQHC or RHC visit.

18(2) (A) A visit shall also include a face-to-face encounter
19between an FQHC or RHC patient and a dental hygienist or a
20dental hygienist in alternative practice.

21(B) Notwithstanding subdivision (e), an FQHC or RHC that
22currently includes the cost of the services of a dental hygienist in
23alternative practice for the purposes of establishing its FQHC or
24RHC rate shall apply for an adjustment to its per-visit rate, and,
25after the rate adjustment has been approved by the department,
26shall bill these services as a separate visit. However, multiple
27encounters with dental professionals that take place on the same
28day shall constitute a single visit. The department shall develop
29the appropriate forms to determine which FQHC’s or RHC rates
30shall be adjusted and to facilitate the calculation of the adjusted
31rates. An FQHC’s or RHC’s application for, or the department’s
32approval of, a rate adjustment pursuant to this subparagraph shall
33not constitute a change in scope of service within the meaning of
34subdivision (e). An FQHC or RHC that applies for an adjustment
35to its rate pursuant to this subparagraph may continue to bill for
36all other FQHC or RHC visits at its existing per-visit rate, subject
37to reconciliation, until the rate adjustment for visits between an
38FQHC or RHC patient and a dental hygienist or a dental hygienist
39in alternative practice has been approved. Any approved increase
40or decrease in the provider’s rate shall be made within six months
P7    1after the date of receipt of the department’s rate adjustment forms
2pursuant to this subparagraph and shall be retroactive to the
3beginning of the fiscal year in which the FQHC or RHC submits
4the request, but in no case shall the effective date be earlier than
5January 1, 2008.

6(C) An FQHC or RHC that does not provide dental hygienist
7or dental hygienist in alternative practice services, and later elects
8to add these services, shall process the addition of these services
9as a change in scope of service pursuant to subdivision (e).

10(h) If FQHC or RHC services are partially reimbursed by a
11third-party payer, such as a managed care entity (as defined in
12Section 1396u-2(a)(1)(B) of Title 42 of the United States Code),
13the Medicare Program, or the Child Health and Disability
14Prevention (CHDP) program, the department shall reimburse an
15FQHC or RHC for the difference between its per-visit PPS rate
16and receipts from other plans or programs on a contract-by-contract
17basis and not in the aggregate, and may not include managed care
18financial incentive payments that are required by federal law to
19be excluded from the calculation.

20(i) (1) An entity that first qualifies as an FQHC or RHC in the
21year 2001 or later, a newly licensed facility at a new location added
22to an existing FQHC or RHC, and any entity that is an existing
23FQHC or RHC that is relocated to a new site shall each have its
24reimbursement rate established in accordance with one of the
25following methods, as selected by the FQHC or RHC:

26(A) The rate may be calculated on a per-visit basis in an amount
27that is equal to the average of the per-visit rates of three comparable
28FQHCs or RHCs located in the same or adjacent area with a similar

30(B) In the absence of three comparable FQHCs or RHCs with
31a similar caseload, the rate may be calculated on a per-visit basis
32in an amount that is equal to the average of the per-visit rates of
33three comparable FQHCs or RHCs located in the same or an
34adjacent service area, or in a reasonably similar geographic area
35with respect to relevant social, health care, and economic

37(C) At a new entity’s one-time election, the department shall
38establish a reimbursement rate, calculated on a per-visit basis, that
39is equal to 100 percent of the projected allowable costs to the
40FQHC or RHC of furnishing FQHC or RHC services during the
P8    1first 12 months of operation as an FQHC or RHC. After the first
212-month period, the projected per-visit rate shall be increased by
3the Medicare Economic Index then in effect. The projected
4allowable costs for the first 12 months shall be cost settled and the
5prospective payment reimbursement rate shall be adjusted based
6on actual and allowable cost per visit.

7(D) The department may adopt any further and additional
8methods of setting reimbursement rates for newly qualified FQHCs
9or RHCs as are consistent with Section 1396a(bb)(4) of Title 42
10of the United States Code.

11(2) In order for an FQHC or RHC to establish the comparability
12of its caseload for purposes of subparagraph (A) or (B) of paragraph
13(1), the department shall require that the FQHC or RHC submit
14its most recent annual utilization report as submitted to the Office
15of Statewide Health Planning and Development, unless the FQHC
16or RHC was not required to file an annual utilization report. FQHCs
17or RHCs that have experienced changes in their services or
18caseload subsequent to the filing of the annual utilization report
19may submit to the department a completed report in the format
20applicable to the prior calendar year. FQHCs or RHCs that have
21not previously submitted an annual utilization report shall submit
22to the department a completed report in the format applicable to
23the prior calendar year. The FQHC or RHC shall not be required
24to submit the annual utilization report for the comparable FQHCs
25or RHCs to the department, but shall be required to identify the
26comparable FQHCs or RHCs.

27(3) The rate for any newly qualified entity set forth under this
28subdivision shall be effective retroactively to the later of the date
29that the entity was first qualified by the applicable federal agency
30as an FQHC or RHC, the date a new facility at a new location was
31added to an existing FQHC or RHC, or the date on which an
32existing FQHC or RHC was relocated to a new site. The FQHC
33or RHC shall be permitted to continue billing for Medi-Cal covered
34benefits on a fee-for-service basis until it is informed of its
35 enrollment as an FQHC or RHC, and the department shall reconcile
36the difference between the fee-for-service payments and the
37FQHC’s or RHC’s prospective payment rate at that time.

38(j) Visits occurring at an intermittent clinic site, as defined in
39subdivision (h) of Section 1206 of the Health and Safety Code, of
40an existing FQHC or RHC, or in a mobile unit as defined by
P9    1paragraph (2) of subdivision (b) of Section 1765.105 of the Health
2and Safety Code, shall be billed by and reimbursed at the same
3rate as the FQHC or RHC establishing the intermittent clinic site
4or the mobile unit, subject to the right of the FQHC or RHC to
5request a scope-of-service adjustment to the rate.

6(k) An FQHC or RHC may elect to have pharmacy or dental
7services reimbursed on a fee-for-service basis, utilizing the current
8fee schedules established for those services. These costs shall be
9adjusted out of the FQHC’s or RHC’s clinic base rate as
10scope-of-service changes. An FQHC or RHC that reverses its
11election under this subdivision shall revert to its prior rate, subject
12to an increase to account for all MEI increases occurring during
13the intervening time period, and subject to any increase or decrease
14associated with applicable scope-of-services adjustments as
15provided in subdivision (e).

16(l) FQHCs and RHCs may appeal a grievance or complaint
17concerning ratesetting, scope-of-service changes, and settlement
18of cost report audits, in the manner prescribed by Section 14171.
19The rights and remedies provided under this subdivision are
20cumulative to the rights and remedies available under all other
21provisions of law of this state.

22(m) The department shall, by no later than March 30, 2008,
23promptly seek all necessary federal approvals in order to implement
24this section, including any amendments to the state plan. To the
25extent that any element or requirement of this section is not
26approved, the department shall submit a request to the federal
27Centers for Medicare and Medicaid Services for any waivers that
28would be necessary to implement this section.

29(n) The department shall implement this section only to the
30extent that federal financial participation is obtained.