Amended  IN  Senate  July 11, 2019
Amended  IN  Senate  July 01, 2019
Amended  IN  Assembly  May 16, 2019
Amended  IN  Assembly  April 23, 2019
Amended  IN  Assembly  April 01, 2019
Amended  IN  Assembly  March 18, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1642

Introduced by Assembly Member Wood

February 22, 2019

An act to amend Sections 14132.91, 14197, 14197.05, 14712, 14713, and 14715 of, to add Sections 14197.04 and 14301.15 to, and to repeal and add Section 14304 of, the Welfare and Institutions Code, relating to Medi-Cal.


LEGISLATIVE COUNSEL'S DIGEST

AB 1642, as amended, Wood. Medi-Cal: managed care plans.
(1) Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which health care services are provided to qualified, low-income persons through various health care delivery systems, including managed care pursuant to Medi-Cal managed care plan contracts. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing federal regulations require a state that contracts with specified Medicaid managed care plans to develop and enforce network adequacy standards, to ensure that services covered under the Medicaid state plan are available and accessible to enrollees of specified Medicaid managed care plans in a timely manner, and to contract with a qualified external quality review organization (EQRO) to produce annually an external quality review technical report that summarizes findings on access and quality of care. Existing state law establishes, until January 1, 2022, certain time and distance and appointment time standards for specified services consistent with those federal regulations to ensure that Medi-Cal managed care covered services are available and accessible to enrollees of Medi-Cal managed care plans in a timely manner, and authorizes a Medi-Cal managed care plan to request approval from the department to use alternative access standards for the time and distance standards if specified conditions are met, including that the Medi-Cal managed care plan has exhausted all reasonable options to obtain providers to meet the applicable standard. Existing state law requires a Medi-Cal managed care plan to provide annually to the department, or upon the department’s request, a report that demonstrates the Medi-Cal managed care plan’s compliance with time and distance standards, and requires the EQRO to compile various data, by plan and by county, related to time and distance standards, including the number of requests for alternative access standards in the plan service area for time and distance.
This bill would require a Medi-Cal managed care plan to provide to the department additional information in its request for the alternative access standards, including a description of the reasons justifying the alternative access standards, and to report to the department on how the Medi-Cal managed care plan arranged for the delivery of Medi-Cal covered services to Medi-Cal enrollees, such as through the use of Medi-Cal covered transportation. The bill would require the department to evaluate, as part of its review and approval of an alternative access standard, if the resulting time and distance is reasonable to expect a beneficiary to travel to receive care. The bill would require a Medi-Cal managed care plan that has received approval from the department to utilize an alternative access standard to assist an enrollee who would travel farther than the established time and distance standards in obtaining an appointment with an appropriate provider within established appointment time standards, to arrange for Medi-Cal covered transportation for the enrollee, as necessary, and to inform all members in mailings of specified related matters, including the Medi-Cal managed care plan’s alternative time and distance standards and how to access Medi-Cal covered transportation.
This bill would require the information compiled by the EQRO to include the extent to which each Medi-Cal managed care plan uses clinically appropriate telecommunications technology to meet established time and distance standards.
(2) Existing law requires the department to pay capitation rates to Medi-Cal managed care plans using actuarial methods, and requires the Medi-Cal managed care capitation rates to be developed pursuant to specified factors, including health-plan-specific encounter and claims data.
This bill would require the department, in establishing capitation rates for Medi-Cal managed care plans, to consider beneficiary access to Medi-Cal covered services, including travel times to receive services, and the ability of each Medi-Cal managed care plan to comply with the time and distance requirements.
(3) Existing law requires the Director of Health Care Services, in accordance with specified procedures, to either terminate a contract with or impose one or more specified sanctions, including civil penalties pursuant to federal law, on a prepaid health plan or Medi-Cal managed care plan if the department makes a finding of noncompliance or for other good cause.
This bill would modify criteria for a finding of noncompliance or for other good cause under those provisions. The bill would expand the types of authorized sanctions and bases for sanctions, would raise the maximum limits of certain sanctions based on the number of violations, and would modify the terms of notice. The bill would require the department to use nonfederal moneys collected by the department under these provisions to be deposited into the General Fund for use, and, upon appropriation by the Legislature, would require these moneys to be used to address workforce issues in the Medi-Cal program and to improve access to care in the Medi-Cal program. The bill would condition the implementation of these requirements on receipt of any necessary federal approvals and the availability of federal financial participation.
(4) Existing law requires the department to implement managed mental health care for Medi-Cal beneficiaries through contracts with county mental health plans. Under existing law, the county mental health plans are responsible for providing specialty mental health services to beneficiaries, and Medi-Cal managed care health plans are responsible for delivering nonspecialty mental health services to beneficiaries.
Existing law requires the department to notify the mental health plan of the department’s determination that a mental health plan has failed to comply with certain provisions, and authorizes the department to impose sanctions. Existing law authorizes the department, if the department imposes fines or penalties, to offset the fines from certain accounts, including the Mental Health Subaccount.
This bill would instead extend the provisions described under paragraph (3) to mental health plans, and would apply those provisions to additional contractors. The bill would authorize the department to temporarily withhold payments of federal financial participation and payments from the above-described accounts until the department determines the contractor has come into compliance.
(5) Existing law requires the department, subject to the availability of funding, to conduct a dental outreach and education program for Medi-Cal beneficiaries that informs them of specified matters, including how to obtain dental care through the Medi-Cal program.
This bill would require the department, subject to the availability of funding, to conduct a preventive services outreach and education program for Medi-Cal beneficiaries, and to consult with specified entities, including health care professional groups and experts, to develop this program. The bill would require the program to inform Medi-Cal beneficiaries about various topics, including how an individual may obtain assistance in accessing Medi-Cal covered services, and to include specified components, such as incorporating the importance of preventive care in ongoing outreach and advertising efforts related to the Medi-Cal program. The bill would authorize the department to direct a Medi-Cal managed care plan to provide funding for this program if the Medi-Cal managed care plan fails to meet the established minimum performance level of preventive service utilization rates.
Digest Key Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  
Bill Text
The people of the State of California do enact as follows:
SECTION 1. Section 14132.91 of the Welfare and Institutions Code is amended to read:
14132.91. (a) Subject to the availability of funding, the department shall conduct a dental outreach and education program for Medi-Cal beneficiaries. The program shall inform Medi-Cal beneficiaries of all of the following:
(1) The availability of dental care and recommended frequencies for regular and preventive dental care.
(2) How to obtain dental care through the Medi-Cal program.
(3) How to avoid inappropriate care or fraudulent providers.
(4) How to obtain assistance in getting care or resolving problems with dental care.
(b) The program shall particularly target underserved populations and parents of young and adolescent children, and shall include all of the following components:
(1) Incorporation of dental themes and information in ongoing outreach and advertising efforts, including those for the Medi-Cal program.
(2) Education and outreach materials for inclusion in mailings to beneficiaries.
(3) Education and consumer protection materials for display and distribution at sites providing dental care to Medi-Cal beneficiaries, clinics, and other health care facilities and sites.
(c) The department shall consult with dental professional groups and experts, community organizations, advertising and media experts, and other parties, as the department deems appropriate, to develop and structure the program in an effective and efficient manner.
(d) (1) Subject to the availability of funding, the department shall conduct a preventive services outreach and education program for Medi-Cal beneficiaries for preventive services assigned a grade A or B by the United States Preventive Services Task Force. The program shall inform Medi-Cal beneficiaries of all of the following:
(A) The availability of Medi-Cal covered services, including preventive care, and recommended frequencies for regular and preventive care.
(B) How to obtain care through the Medi-Cal program.
(C) How to obtain assistance in getting care or resolving problems with accessing care.
(2) The preventive services outreach and education program shall particularly target underserved populations and parents of young and adolescent children, and shall include all of the following components:
(A) Incorporation of the importance of preventive care in ongoing outreach and advertising efforts, including those for the Medi-Cal program.
(B) Education and outreach materials for inclusion in mailings to beneficiaries.
(C) Education and consumer protection materials for display and distribution at sites providing health care to Medi-Cal beneficiaries, clinics, and other health care facilities and sites.
(3) The department shall consult with health care professional groups and experts, community organizations, advertising and media experts, and other parties, as the department deems appropriate, to develop and structure the program in an effective and efficient manner.
(4) If a Medi-Cal managed care plan fails to meet the department’s established minimum performance level of preventive service utilization rates, the department may direct the Medi-Cal managed care plan to provide funding for the preventive services outreach and education program as established pursuant to this subdivision.
SEC. 2. Section 14197 of the Welfare and Institutions Code is amended to read:
14197. (a) It is the intent of the Legislature that the department implement and monitor compliance with the time and distance requirements set forth in Sections 438.68, 438.206, and 438.207 of Title 42 of the Code of Federal Regulations and this section, to ensure that all Medi-Cal managed care covered services are available and accessible to enrollees of Medi-Cal managed care plans in a timely manner, as those standards were enacted in May 2016.
(b) Commencing January 1, 2018, for covered benefits under its contract, as applicable, a Medi-Cal managed care plan shall maintain a network of providers that are located within the following time and distance standards for the following services:
(1) For primary care, both adult and pediatric, 10 miles or 30 minutes from the beneficiary’s place of residence.
(2) For hospitals, 15 miles or 30 minutes from the beneficiary’s place of residence.
(3) For dental services provided by a Medi-Cal managed care plan, 10 miles or 30 minutes from the beneficiary’s place of residence.
(4) For obstetrics and gynecology primary care, 10 miles or 30 minutes from the beneficiary’s place of residence.
(c) Commencing July 1, 2018, for the covered benefits under its contracts, as applicable, a Medi-Cal managed care plan shall maintain a network of providers that are located within the following time and distance standards for the following services:
(1) For specialists, as defined in subdivision (h), adult and pediatric, including obstetric and gynecology specialty care, as follows:
(A) Up to 15 miles or 30 minutes from the beneficiary’s place of residence for the following counties: Alameda, Contra Costa, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Mateo, and Santa Clara.
(B) Up to 30 miles or 60 minutes from the beneficiary’s place of residence for the following counties: Marin, Placer, Riverside, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus, and Ventura.
(C) Up to 45 miles or 75 minutes from the beneficiary’s place of residence for the following counties: Amador, Butte, El Dorado, Fresno, Kern, Kings, Lake, Madera, Merced, Monterey, Napa, Nevada, San Bernardino, San Luis Obispo, Santa Barbara, Sutter, Tulare, Yolo, and Yuba.
(D) Up to 60 miles or 90 minutes from the beneficiary’s place of residence for the following counties: Alpine, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Imperial, Inyo, Lassen, Mariposa, Mendocino, Modoc, Mono, Plumas, San Benito, Shasta, Sierra, Siskiyou, Tehama, Trinity, and Tuolumne.
(2) For pharmacy services, 10 miles or 30 minutes from the beneficiary’s place of residence.
(3) For outpatient mental health services, as follows:
(A) Up to 15 miles or 30 minutes from the beneficiary’s place of residence for the following counties: Alameda, Contra Costa, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Mateo, and Santa Clara.
(B) Up to 30 miles or 60 minutes from the beneficiary’s place of residence for the following counties: Marin, Placer, Riverside, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus, and Ventura.
(C) Up to 45 miles or 75 minutes from the beneficiary’s place of residence for the following counties: Amador, Butte, El Dorado, Fresno, Kern, Kings, Lake, Madera, Merced, Monterey, Napa, Nevada, San Bernardino, San Luis Obispo, Santa Barbara, Sutter, Tulare, Yolo, and Yuba.
(D) Up to 60 miles or 90 minutes from the beneficiary’s place of residence for the following counties: Alpine, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Imperial, Inyo, Lassen, Mariposa, Mendocino, Modoc, Mono, Plumas, San Benito, Shasta, Sierra, Siskiyou, Tehama, Trinity, and Tuolumne.
(4) (A) For outpatient substance use disorder services other than opioid treatment programs, as follows:
(i) Up to 15 miles or 30 minutes from the beneficiary’s place of residence for the following counties: Alameda, Contra Costa, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Mateo, and Santa Clara.
(ii) Up to 30 miles or 60 minutes from the beneficiary’s place of residence for the following counties: Marin, Placer, Riverside, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus, and Ventura.
(iii) Up to 60 miles or 90 minutes from the beneficiary’s place of residence for the following counties: Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Imperial, Inyo, Kern, Kings, Lake, Lassen, Madera, Mariposa, Mendocino, Merced, Modoc, Monterey, Mono, Napa, Nevada, Plumas, San Benito, San Bernardino, San Luis Obispo, Santa Barbara, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tulare, Tuolumne, Yolo, and Yuba.
(B) For opioid treatment programs, as follows:
(i) Up to 15 miles or 30 minutes from the beneficiary’s place of residence for the following counties: Alameda, Contra Costa, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Mateo, and Santa Clara.
(ii) Up to 30 miles or 60 minutes from the beneficiary’s place of residence for the following counties: Marin, Placer, Riverside, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus, and Ventura.
(iii) Up to 45 miles or 75 minutes from the beneficiary’s place of residence for the following counties: Amador, Butte, El Dorado, Fresno, Kern, Kings, Lake, Madera, Merced, Monterey, Napa, Nevada, San Bernardino, San Luis Obispo, Santa Barbara, Sutter, Tulare, Yolo, and Yuba.
(iv) Up to 60 miles or 90 minutes from the beneficiary’s place of residence for the following counties: Alpine, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Imperial, Inyo, Lassen, Mariposa, Mendocino, Modoc, Mono, Plumas, San Benito, Shasta, Sierra, Siskiyou, Tehama, Trinity, and Tuolumne.
(d) (1) (A) A Medi-Cal managed care plan shall comply with the appointment time standards developed pursuant to Section 1367.03 of the Health and Safety Code, Section 1300.67.2.2 of Title 28 of the California Code of Regulations, subject to any authorized exceptions in Section 1300.67.2.2 of Title 28 of the California Code of Regulations, and the standards set forth in contracts entered into between the department and Medi-Cal managed care plans.
(B) Commencing July 1, 2018, subparagraph (A) applies to Medi-Cal managed care plans that are not, as of January 1, 2018, subject to the appointment time standards described in subparagraph (A).
(2) A Medi-Cal managed care plan shall comply with the following availability standards for skilled nursing facility services and intermediate care facility services, as follows:
(A) Within five business days of the request for the following counties: Alameda, Contra Costa, Los Angeles, Orange, Sacramento, San Diego, San Francisco, San Mateo, and Santa Clara.
(B) Within seven business days of the request for the following counties: Marin, Placer, Riverside, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus, and Ventura.
(C) Within 14 calendar days of the request for the following counties: Amador, Butte, El Dorado, Fresno, Kern, Kings, Lake, Madera, Merced, Monterey, Napa, Nevada, San Bernardino, San Luis Obispo, Santa Barbara, Sutter, Tulare, Yolo, and Yuba.
(D) Within 14 calendar days of the request for the following counties: Alpine, Calaveras, Colusa, Del Norte, Glenn, Humboldt, Imperial, Inyo, Lassen, Mariposa, Mendocino, Modoc, Mono, Plumas, San Benito, Shasta, Sierra, Siskiyou, Tehama, Trinity, and Tuolumne.
(3) A county Drug Medi-Cal organized delivery system shall provide an appointment within three business days to an opioid treatment program.
(4) A dental managed care plan shall provide an appointment within four weeks of a request for routine pediatric dental services and within 30 calendar days of a request for specialist pediatric dental services.
(e) (1) The department, upon request of a Medi-Cal managed care plan, may authorize alternative access standards for the time and distance standards established under this section if either of the following occur:
(A) The requesting Medi-Cal managed care plan has exhausted all other reasonable options to obtain providers to meet the applicable standard.
(B) The department determines that the requesting Medi-Cal managed care plan has demonstrated that its delivery structure is capable of delivering the appropriate level of care and access.
(2) If a Medi-Cal managed care plan cannot meet the time and distance standards set forth in this section, the Medi-Cal managed care plan shall submit a request for alternative access standards to the department, in the form and manner specified by the department. A request may be submitted at the same time as the Medi-Cal managed care plan submits its annual demonstration of compliance with time and distance standards, if known at that time.
(3) A request for alternative access standards shall be approved or denied on a ZIP Code and provider type, including specialty type, basis by the department within 90 days of submission of the request. The Medi-Cal managed care plan shall also include a description of the reasons justifying the alternative access standards based on those facts and circumstances, and how the Medi-Cal managed care plan intends to arrange for beneficiaries to access covered services if the health care provider is located outside of the time and distance standards specified in subdivision (c). The department may stop the 90-day timeframe, on one or more occasions as necessary, in the event of an incomplete submission or to obtain additional information from the Medi-Cal managed care plan requesting the alternative access standards. Upon submission of sufficient additional information to the department, the 90-day timeframe shall resume at the same point in time it was previously stopped, except if there is less than 30 days remaining in which case the department shall approve or deny the request within 30 days of submission of sufficient additional information. If the department rejects the Medi-Cal managed care plan’s proposal, the department shall inform the Medi-Cal managed care plan of the department’s reason for rejecting the proposal. The department shall post any approved alternative access standards on its internet website.
(4) The department may authorize a Medi-Cal managed care plan to use clinically appropriate telecommunications technology as a means of determining annual compliance with the time and distance standards established pursuant to this section or may approve alternative access to care, including telehealth consistent with the requirements of Section 2290.5 of the Business and Professions Code, e-visits, or other evolving and innovative technological solutions that are used to provide care from a distance.
(5) As part of the department’s evaluation of a request submitted by a Medi-Cal managed care plan to utilize an alternative access standard pursuant to this subdivision, the department shall evaluate and determine whether the resulting time and distance is reasonable to expect a beneficiary to travel to receive care.
(f) (1) Effective for contract periods commencing on or after July 1, 2018, a Medi-Cal managed care plan shall, on an annual basis and when requested by the department, demonstrate to the department both of the following:
(A) The Medi-Cal managed care plan’s compliance with the time and distance and appointment time standards developed pursuant to this section.
(B) How the Medi-Cal managed care plan arranged for the delivery of Medi-Cal covered services to Medi-Cal enrollees, such as through the use of either Medi-Cal covered transportation or clinically appropriate telecommunications technology, as specified in paragraph (4) of subdivision (c), if the enrollees of a Medi-Cal managed care plan needed to obtain health care services from a health care provider or a facility located outside of the time and distance standards, as specified in subdivision (c).
The report shall measure compliance separately for adult and pediatric services for primary care, behavioral health, and core specialist services.
(2) Effective for contract periods commencing on or after July 1, 2018, the department shall evaluate on an annual basis a Medi-Cal managed care plan’s compliance with the time and distance and appointment time standards implemented pursuant to this section. This evaluation may include, but need not be limited to, annual and random surveys, investigation of complaints, grievances, or other indicia of noncompliance. Nothing in this subdivision shall be construed to limit the appeal rights of a Medi-Cal managed care plan under its contracts with the department.
(3) The department shall publish annually on its internet website a report that details the department’s findings in evaluating a Medi-Cal managed care plan’s compliance under paragraph (2). At a minimum, the department shall specify in this report those Medi-Cal managed care plans, if any, that were subject to a corrective action plan due to noncompliance with the time and distance and appointment time standards implemented pursuant to this section during the applicable year and the basis for the department’s finding of noncompliance. The report shall include a Medi-Cal managed care plan’s response to the corrective plan, if available.
(g) The department shall consult with Medi-Cal managed care plans, including mental health plans, health care providers, consumers, providers and consumers of long-term services and supports, and organizations representing Medi-Cal beneficiaries in the implementation of the requirements of this section.
(h) For purposes of this section, the following definitions apply:
(1) “Medi-Cal managed care plan” means any individual, organization, or entity that enters into a contract with the department to provide services to enrolled Medi-Cal beneficiaries pursuant to any of the following:
(A) Article 2.7 (commencing with Section 14087.3), including dental managed care programs developed pursuant to Section 14087.46.
(B) Article 2.8 (commencing with Section 14087.5).
(C) Article 2.81 (commencing with Section 14087.96).
(D) Article 2.82 (commencing with Section 14087.98).
(E) Article 2.9 (commencing with Section 14088).
(F) Article 2.91 (commencing with Section 14089).
(G) Chapter 8 (commencing with Section 14200), including dental managed care plans.
(H) Chapter 8.9 (commencing with Section 14700).
(I) A county Drug Medi-Cal organized delivery system authorized under the California Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the federal Centers for Medicare and Medicaid Services and described in the Special Terms and Conditions. For purposes of this subdivision, “Special Terms and Conditions” shall have has the same meaning as set forth in subdivision (o) of Section 14184.10.
(2) “Specialist” means any of the following:
(A) Cardiology/interventional cardiology.
(B) Nephrology.
(C) Dermatology.
(D) Neurology.
(E) Endocrinology.
(F) Ophthalmology.
(G) Ear, nose, and throat/otolaryngology.
(H) Orthopedic surgery.
(I) Gastroenterology.
(J) Physical medicine and rehabilitation.
(K) General surgery.
(L) Psychiatry.
(M) Hematology.
(N) Oncology.
(O) Pulmonology.
(P) HIV/AIDS specialists/infectious diseases.
(i) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this section by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions until the time regulations are adopted.
(j) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.
(k) This section shall remain in effect only until January 1, 2022, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2022, deletes or extends that date.
SEC. 3. Section 14197.04 is added to the Welfare and Institutions Code, immediately following Section 14197, to read:
14197.04. (a) (1) A Medi-Cal managed care plan that has received approval from the department to utilize an alternative access standard pursuant to subdivision (e) of Section 14197, upon the request of an enrollee, shall assist an enrollee who is required to travel farther than the time and distance standards, as established in subdivision (c) of Section 14197, in obtaining an appointment with an appropriate specialist provider within the geographic area established pursuant to subdivision (b) (c) of Section 14197 and the appointment time standards established pursuant to subdivision (d) of Section 14197.
(2) For purposes of complying with the requirement to assist an enrollee, as specified in paragraph (1), a Medi-Cal managed care plan shall do either of the following:
(A) Make its best effort to establish a member-specific case agreement agreement, at the Medi-Cal fee-for-service rate or a rate mutually agreed upon by the specialist provider and the plan, with an appropriate specialist provider within the geographic area established pursuant to subdivision (b) of Section 14197 and the appointment time standards established pursuant to subdivision (d) of Section 14197.
(B) Arrange for an appointment with a network specialist provider within the geographic area established pursuant to subdivision (b) of Section 14197 and the appointment time standards established pursuant to subdivision (d) of Section 14197.
(3) If The requirements of paragraph (1) shall not apply if there is not a specialist provider with an office location within the applicable time and distance standard in relation to the area in which the enrollee resides, the requirements of paragraph (1) shall not apply. within which the enrollee resides or the Medi-Cal managed care plan has attempted to contract with the specialist provider pursuant to subparagraph (A) of paragraph (2) in the most recent fiscal year.
(b) If a specialist provider is unavailable to render necessary health care services pursuant to subdivision (a) to an enrollee within the appointment time standards established pursuant to subdivision (d) of Section 14197, as specified in subdivision (a), the Medi-Cal managed care plan shall arrange for Medi-Cal covered transportation for an enrollee to obtain covered Medi-Cal services pursuant to Section 14132.
(c) A Medi-Cal managed care plan that has received approval from the department to utilize an alternative access standard pursuant to subdivision (e) of Section 14197 shall inform its members in the plan evidence of coverage or member handbook of both of the following:
(1) The alternative access standards.
(2) The Medi-Cal managed care plan contact information for enrollees to direct their questions about the alternative access standards, the availability of Medi-Cal covered transportation, and how to obtain Medi-Cal covered services.
(d) (1) “Medi-Cal managed care plan” means any individual, organization, or entity that enters into a contract with the department to provide services to enrolled Medi-Cal beneficiaries pursuant to any of the following:
(A) Article 2.7 (commencing with Section 14087.3), including dental managed care programs developed pursuant to Section 14087.46.
(B) Article 2.8 (commencing with Section 14087.5).
(C) Article 2.81 (commencing with Section 14087.96).
(D) Article 2.82 (commencing with Section 14087.98).
(E) Article 2.91 (commencing with Section 14089).
(F) Chapter 8 (commencing with Section 14200), including dental managed care plans.
(G) Chapter 8.9 (commencing with Section 14700).
(H) A county Drug Medi-Cal organized delivery system authorized under the California Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the federal Centers for Medicare and Medicaid Services and described in the Special Terms and Conditions. For purposes of this subdivision, “Special Terms and Conditions” shall have the same meaning as set forth in subdivision (o) of Section 14184.10.
(I) Chapter 3 (commencing with Section 101675) of Part 4 of Division 101 of the Health and Safety Code.
(2) “Specialist provider” has the same meaning as “specialist” as defined in paragraph (2) of subdivision (h) of Section 14197.
SEC. 4. Section 14197.05 of the Welfare and Institutions Code is amended to read:
14197.05. (a) As part of the federally required external quality review organization (EQRO) review of Medi-Cal managed care plans in the annual detailed technical report required by Section 438.364 of Title 42 of the Code of Federal Regulations, effective for contract periods commencing on or after July 1, 2018, the EQRO designated by the department shall compile the data described in subdivision (b), by plan and by county, for the purpose of informing the status of implementation of the requirements of Section 14197.
(b) (1) The information compiled by the EQRO shall include all of the following:
(A) Number of requests for alternative access standards in the plan service area for time and distance, categorized by provider types, including specialists, and by adult and pediatric.
(B) Number of allowable exceptions for the appointment time standard, if known, categorized by provider types, including specialists, and by adult and pediatric.
(C) Distance and driving time between the nearest network provider and ZIP Code of the beneficiary furthest from that provider for requests for alternative access standards.
(D) Approximate number of beneficiaries impacted by alternative access standards or allowable exceptions.
(E) Percentage of providers in the plan service area, by provider and specialty type, that are under a contract with a Medi-Cal managed care plan.
(F) The number of requests for alternative access standards approved or denied by ZIP Code and provider and specialty type, and the reasons for the approval or denial of the request for alternative access standards. If an approval is authorized, the reasons for approval shall identify whether the approval was granted for either of the following reasons:
(i) A provider was not located in the requested ZIP Code.
(ii) The Medi-Cal managed care plan was unable to enter into a contract with a provider or providers in the requested ZIP Code.
(G) The process of ensuring out-of-network access.
(H) Descriptions of contracting efforts and explanation for why a contract was not executed.
(I) Timeframe for approval or denial of a request for alternative access standards by the department.
(J) Consumer complaints, if any.
(K) The extent to which each Medi-Cal managed care plan uses clinically appropriate telecommunications technology, including telehealth, consistent with the requirements of Section 2290.5 of the Business and Professions Code, and e-visits, as specified in paragraph (4) of subdivision (e) of Section 14197, to meet the time and distance standards established pursuant to Section 14197.
(2) The information described in paragraph (1) shall be presented in a chart format to enable comparison among counties, provider types, and plans.
(c) The EQRO shall develop a methodology to assess information that will help inform the experience of individuals placed in a skilled nursing facility or intermediate care facility and the distance that they are placed from their place of residence. The EQRO shall report the results from the use of this methodology in the EQRO annual Medi-Cal managed care plan technical report.
(d) The department shall comply with the requirements of subsection (c) of Section 438.364 of Title 42 of the Code of Federal Regulations in making the information described in this section publicly available.
SEC. 5. Section 14301.15 is added to the Welfare and Institutions Code, to read:
14301.15. In establishing capitation rates, the department shall take into consideration both of the following:
(a) Beneficiary access to Medi-Cal covered services, including travel times to receive services.
(b) The ability of each Medi-Cal managed care plan to comply with the time and distance requirements, as set forth in subdivision (c) of Section 14197, and appointment time standards, as established pursuant to subdivision (d) of Section 14197.
SEC. 6. Section 14304 of the Welfare and Institutions Code is repealed.
SEC. 7. Section 14304 is added to the Welfare and Institutions Code, to read:
14304. (a) Notwithstanding any other law, if the director finds that any entity that contracts with the department for the delivery of health care services (contractor), including a Medi-Cal managed care plan or a prepaid health plan, fails to comply with contract requirements, state or federal law or regulations, or the state plan, plan or approved waivers, or for other good cause, the director may terminate the contract or impose sanctions as set forth in this section. Good cause includes, but is not limited to, a finding of deficiency that results in improper denial or delay in the delivery of health care services, potential endangerment to patient care, disruption in the contractor’s provider network, failure to approve continuity of care, that claims accrued or to accrue have not or will not be recompensed, or a delay in required contractor reporting to the department.
(b) The director may identify findings of noncompliance or good cause through any means, including, but not limited to, findings in audits, investigations, contract compliance reviews, quality improvement system monitoring, routine monitoring, facility site surveys, encounter and provider data submissions, grievances and appeals, network adequacy reviews, assessments of timely access requirements, reviews of utilization data, health plan rating systems, fair hearing decisions, complaints from beneficiaries and other stakeholders, whistleblowers, and contractor self-disclosures.
(c) Except when the director determines that there is an immediate threat to the health of Medi-Cal beneficiaries receiving health care services from the contractor, at the request of the contractor, the department shall hold a public hearing to commence 30 days after notice of intent to terminate the contract has been received by the contractor. The department shall present evidence at the hearing showing good cause for the termination. The department shall assign an administrative law judge who shall provide a written recommendation to the department on the termination of the contract within 30 days after conclusion of the hearing. Reasonable notice of the hearing shall be given to the contractor, Medi-Cal beneficiaries receiving services through the contractor, and other interested parties, including any other persons and organizations as the director may deem necessary. The notice shall state the effective date of, and the reason for, the termination.
(d) In lieu of contract termination, the director shall have the power and authority to require or impose a plan of correction and issue one or more of the following sanctions against a contractor for findings of noncompliance or good cause, including, but not limited to, those specified in subdivision (a):
(1) Temporarily or permanently suspend enrollment and marketing activities.
(2) Require the contractor to suspend or terminate contractor personnel or subcontractors.
(3) Issue one or more of the temporary suspension orders set forth in subdivision (j).
(4) Impose temporary management consistent with the requirements specified in Section 438.706 of Title 42 of the Code of Federal Regulations.
(5) Suspend default enrollment of enrollees who do not select a contractor for the delivery of health care services.
(6) Impose civil monetary sanctions consistent with the dollar amounts and violations specified in Section 438.704 of Title 42 of the Code of Federal Regulations, as follows:
(A) A limit of twenty-five thousand dollars ($25,000) for each determination of the following:
(i) The contractor fails to provide medically necessary services that the contractor is required to provide, under law or under its contract with the department, to an enrollee covered under the contract.
(ii) The contractor misrepresents or falsifies information to an enrollee, potential enrollee, or health care provider.
(iii) The contractor distributes directly, or indirectly through an agent or independent contractor, marketing materials that have not been approved by the state or that contain false or materially misleading information.
(B) A limit of one hundred thousand dollars ($100,000) for each determination of the following:
(i) The contractor conducts any act of discrimination against an enrollee on the basis of their health status or need for health care services. This includes termination of enrollment or refusal to reenroll a beneficiary, except as permitted under the Medicaid program, or any practice that would reasonably be expected to discourage enrollment by beneficiaries whose medical condition or history indicates probable need for substantial future medical services.
(ii) The contractor misrepresents or falsifies information that it furnishes to the federal Centers for Medicare and Medicaid Services or to the department.
(C) A limit of fifteen thousand dollars ($15,000) for each beneficiary the director determines was not enrolled because of a discriminatory practice under clause (i) of subparagraph (B). This sanction is subject to the overall limit of one hundred thousand dollars ($100,000) under subparagraph (B).
(e) Notwithstanding the monetary sanctions imposed for the violations set forth in paragraph (6) of subdivision (d), the director may impose monetary sanctions in accordance with this section based on any of the following:
(1) The contractor violates any federal or state statute or regulation.
(2) The contractor violates any provision of its contract with the department.
(3) The contractor violates any provision of the state plan or approved waivers.
(4) The contractor fails to meet quality metrics or benchmarks prospectively established by the department.
(5) The contractor fails to demonstrate that it has an adequate network to meet anticipated utilization in its service area.
(6) The contractor fails to comply with network adequacy standards, including time and distance, timely access, and provider-to-beneficiary ratio requirements.
(7) The contractor fails to comply with the requirements of a corrective action plan.
(8) The contractor fails to submit timely and accurate network provider data.
(9) The director identifies deficiencies in the contractor’s delivery of health care services.
(10) The director identifies deficiencies in the contractor’s operations, including the timely payment of claims.
(11) The contractor fails to comply with reporting requirements, including, but not limited to, those set forth in Section 53862 of Title 22 of the California Code of Regulations.
(12) The contractor fails to timely and accurately process grievances or appeals.
(f) (1) Monetary sanctions imposed pursuant to subdivision (e) may be separately and independently assessed and may also be assessed for each day the contractor fails to correct an identified deficiency. For a deficiency that impacts beneficiaries, each beneficiary impacted constitutes a separate violation. Monetary sanctions shall be assessed in the following amounts:
(A) Up to twenty-five thousand dollars ($25,000) for a first violation.
(B) Up to fifty thousand dollars ($50,000) for a second violation.
(C) Up to one hundred thousand dollars ($100,000) for each subsequent violation.
(2) For monetary sanctions imposed on a contractor that is funded from one or more of the realigned accounts described in paragraphs (2) to (4), inclusive, of subdivision (n), the department shall calculate a percentage of the funds attributable to the contractor to be offset per month pursuant to paragraphs (2) to (4), inclusive, of subdivision (n) until the amount offset equals the amount of the penalty imposed pursuant to paragraph (1).

(g)When imposing monetary sanctions, the director may consider any of the following nonexclusive factors:

(g) When assessing sanctions pursuant to this section, the director shall determine the appropriate amount of the penalty for each violation based upon one or more of the following nonexclusive factors:
(1) The nature, scope, and gravity of the violation. violation, including the potential harm or impact on beneficiaries.
(2) The good or bad faith of the contractor.
(3) The contractor’s history of violations.
(4) The willfulness of the violation.
(5) The nature and extent to which the contractor cooperated with the department’s investigation.
(6) The nature and extent to which the contractor aggravated or mitigated any injury or damage caused by the violation.
(7) The nature and extent to which the contractor has taken corrective action to ensure the violation will not recur.
(8) The financial status of the contractor. contractor, including whether the sanction will affect the ability of the contractor to come into compliance.
(9) The financial cost of the health care service that was denied, delayed, or modified.
(10) Whether the violation is an isolated incident.
(11) The amount of the penalty necessary to deter similar violations in the future.
(12) Any other mitigating factors presented by the contractor.
(h) Except in exigent circumstances, circumstances in which there is an immediate risk to the health of beneficiaries, as determined by the department, the director shall give reasonable written notice to the contractor of the intention to impose any of the sanctions authorized by this section and others who may be directly interested, including any other persons and organizations as the director may deem necessary. The notice shall include the effective date date for, the duration of, and the reason for each sanction proposed by the director.
(i) Notwithstanding subdivision (d), the director shall terminate a contract with a contractor that the United States Secretary of Health and Human Services has determined does not meet the requirements for participation in the Medicaid program contained in Subchapter XIX (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code.
(j) (1) The department may make one or more of the following temporary suspension orders as an immediate sanction:
(A) Temporarily suspend enrollment activities.
(B) Temporarily suspend marketing activities.
(C) Require the contractor to temporarily suspend specified personnel of the contractor.
(D) Require the contractor to temporarily suspend participation by a specified subcontractor.
(2) The temporary suspension orders shall be effective no earlier than 20 days after the notice specified in subdivision (k).
(k) Prior to issuing a temporary suspension order, or temporarily withholding funds pursuant to subdivision (o), the department shall provide the contractor with a written notice. The notice shall state the department’s intent to impose a temporary suspension or temporary withhold, and specify the nature and effective date of the temporary suspension or temporary withhold. The contractor shall have 15 30 calendar days from the date of receipt of the notice to file a written appeal with the department. Upon receipt of a written appeal filed by the contractor, the department shall within 15 days set the matter for hearing, which shall be held as soon as possible, but not later than 30 days after receipt of the notice of hearing by the contractor. The hearing may be continued at the request of the contractor if a continuance is necessary to permit presentation of an adequate defense. The temporary suspension order shall remain in effect until the hearing is completed and the department has made a final determination on the merits. However, the temporary suspension order shall be deemed vacated if the director fails to make a final determination on the merits within 60 days after the original hearing has been completed. The department shall stay imposition of a temporary withhold, pursuant to subdivision (o), until the hearing is completed and the department has made a final determination on the merits.
(l) A contractor may request a hearing in connection with any sanctions applied pursuant to subdivision (d) or (e) within 15 working days after the notice of the effective date of the sanctions has been given, by sending a letter so stating to the address specified in the notice. The department shall stay collection of monetary sanctions upon receipt of the request for a hearing. Collection of the sanction shall remain stayed until the effective date of the final decision of the department.
(m) Except as otherwise provided in this section, all hearings to review the imposition of sanctions, including temporary suspension orders, the withholding or offsetting of funds pursuant to subdivision (n), or the temporary withholding of funds pursuant to subdivision (o), shall be held pursuant to the procedures set forth in Section 100171 of the Health and Safety Code.
(n) (1) If the director imposes monetary sanctions pursuant to this section on a contractor, except for a contractor described in paragraphs (2) to (4), inclusive, the amount of the sanction may be collected by withholding the amount from capitation or other associated payments owed to the contractor.
(2) If the director imposes monetary sanctions on a contractor that is funded from the Mental Health Subaccount, the Mental Health Equity Subaccount, the Vehicle License Collection Account of the Local Revenue Fund, or the Mental Health Account, the director may offset the monetary sanctions from the respective account. The offset shall be subject to paragraph (2) of subdivision (q).
(3) If the director imposes monetary sanctions on a contractor that is funded from the Behavioral Health Subaccount of the Local Revenue Fund 2011, the director may offset the monetary sanctions from that account from the distribution attributable to the applicable contractor. The offset shall be subject to paragraph (2) of subdivision (q).
(4) If the director imposes monetary sanctions on a contractor that is funded from any other mental health or substance use disorder realignment funds from which the Controller is authorized to make distributions to the contractor, the director may offset the monetary sanctions from these funds if the funds described in paragraphs (2) and (3) are insufficient for the purposes described in this subdivision, as appropriate. The offset shall be subject to paragraph (2) of subdivision (q).
(o) (1) Whenever the department determines that a mental health plan or any entity that contracts with the department to provide Drug Medi-Cal services has violated state or federal law, a requirement of this chapter, Chapter 8 (commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or Chapter 8.9 (commencing with Section 14700), or any regulations, the state plan, or a term or condition of an approved waiver, or a provision of its contract with the department, the department may temporarily withhold payments of federal financial participation and payments from the accounts listed in paragraphs (2) to (4), inclusive, of subdivision (n). The department shall temporarily withhold amounts it deems necessary to ensure the mental health plan or the entity that contracts with the department to provide Drug Medi-Cal services promptly corrects the violation. The department shall release the temporarily withheld funds when it determines the mental health plan or the entity that contracts with the department to provide Drug Medi-Cal services has come into compliance.
(2) A mental health plan, or any entity that contracts with the department to provide Drug Medi-Cal services, may appeal the imposition of a temporary withhold pursuant to this subdivision in accordance with the procedures described in subdivisions (k) and (m). Imposition of a temporary withhold shall be stayed until the effective date of the final decision of the department.
(p) This section shall be read in conjunction with, and apply in addition to, any other applicable law that authorizes the department to impose sanctions or otherwise take remedial action upon contractors.
(q) (1) Notwithstanding any other law, nonfederal moneys collected by the department pursuant to this section, except for moneys collected from a contractor funded from one or more of the realigned accounts described in paragraphs (2) to (4), inclusive, of subdivision (n), shall be deposited into the General Fund for use, and upon appropriation by the Legislature, to address workforce issues in the Medi-Cal program and to improve access to care in the Medi-Cal program.
(2) Monetary sanctions imposed via offset on a contractor that is funded from one or more of the realigned accounts described in paragraphs (2) to (4), inclusive, of subdivision (n) shall be redeposited into the account from which the monetary sanctions were offset pursuant to paragraphs (2) to (4), inclusive, of subdivision (n). The department shall notify the Department of Finance of the percentage reduction for the affected county. The Department of Finance shall subsequently notify the Controller, and the Controller shall redistribute the monetary sanction amount to non-sanctioned counties based on each county’s prorated share of the monthly base allocations from the realigned account. With respect to an individual contractor, the department shall not collect via offset more than 25% of the total amount of the funds distributed from the applicable account or accounts that are attributable to the contractor in a given month. If the department is not able to collect the full amount of monetary sanctions imposed on a contractor funded from one or more of the realigned accounts described in paragraphs (2) to (4), inclusive, of subdivision (n) in a given month, the department shall continue to offset the amounts attributable to the contractor in subsequent months until the full amount of monetary sanctions has been collected.
(r) (1) Notwithstanding Chapter 3.5 (commencing 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, in whole or in part, by means of plan or county letters, information notices, plan or provider bulletins, or other similar instructions, without taking regulatory action.
(2) By July 1, 2022, the department shall adopt regulations to implement this section in accordance with the requirements of Chapter 3.5 (commencing Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(s) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.
(t) For purposes of this section, “contractor” means any individual, organization, or entity that enters into a contract with the department to provide services to enrolled Medi-Cal beneficiaries pursuant to any of the following:
(1) Article 2.7 (commencing with Section 14087.3) of Chapter 7, including dental managed care programs developed pursuant to Section 14087.46.
(2) Article 2.8 (commencing with Section 14087.5) of Chapter 7.
(3) Article 2.81 (commencing with Section 14087.96) of Chapter 7.
(4) Article 2.82 (commencing with Section 14087.98) of Chapter 7.
(5) Article 2.9 (commencing with Section 14088) of Chapter 7.
(6) Article 2.91 (commencing with Section 14089) of Chapter 7.
(7) Chapter 8 (commencing with Section 14200), including dental managed care plans.
(8) Chapter 8.9 (commencing with Section 14700).
(9) A county Drug Medi-Cal organized delivery system authorized under the California Medi-Cal 2020 Demonstration, Number 11-W-00193/9, as approved by the federal Centers for Medicare and Medicaid Services and described in the Special Terms and Conditions. For purposes of this paragraph, “Special Terms and Conditions” has the same meaning as set forth in subdivision (o) of Section 14184.10.
SEC. 8. Section 14712 of the Welfare and Institutions Code is amended to read:
14712. (a) Notwithstanding any other state law, the department shall implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans. Mental health plans may include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by the department to meet mental health plan standards. A contract may be exclusive and may be awarded on a geographic basis.
(b) Two or more counties acting jointly may agree to deliver or subcontract for the delivery of specialty mental health services subject to the approval by the department. The agreement may encompass all or any portion of the specialty mental health services provided pursuant to this chapter. This agreement shall not relieve the individual counties of fiscal responsibility for providing these services. Any agreement between counties shall delineate each county’s responsibilities and fiscal liability for overpayments.
(c) (1) The department shall contract with a county or counties acting jointly for the delivery of specialty mental health services to each county’s eligible Medi-Cal beneficiary population. If a county decides not to contract with the department, does not renew its contract, or is unable to meet the standards set by the department, the county shall inform the department of this decision in writing.
(2) If the county is unwilling to contract for the delivery of specialty mental health services, the department shall ensure that specialty mental health services are provided to Medi-Cal beneficiaries.
(3) If the department or county determines that the county is unable to adequately provide specialty mental health services, or that the county does not meet the standards of a mental health plan, the department shall ensure that specialty mental health services are provided to Medi-Cal beneficiaries.
(4) The department may contract with qualifying individual counties, counties acting jointly, or other qualified entities approved by the department for the delivery of specialty mental health services in any county that is unable or unwilling to contract with the department. The county may not subsequently contract to provide specialty mental health services under this chapter unless the department elects to contract with the county.
(d) If a county does not contract with the department or other department-approved entity to provide specialty mental health services, the department shall work with the Department of Finance and the Controller to sequester funds from the county that is unable or unwilling to contract in accordance with Section 30027.10 of the Government Code.
SEC. 9. Section 14713 of the Welfare and Institutions Code is amended to read:
14713. (a) The department and mental health plans shall comply with all applicable federal laws, regulations, and the guidelines, standards, and requirements specified in the state plan, waiver, and mental health plan contract, and, except as provided in this chapter, all applicable state statutes and regulations.
(b) If the department determines that a mental health plan has failed to comply with the requirements of Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or this chapter, the department may impose sanctions and plans of correction pursuant to Section 14304.
(c) If federal requirements that affect the provisions of this chapter are changed, it is the intent of the Legislature that state requirements be revised to comply with those changes.
SEC. 10. Section 14715 of the Welfare and Institutions Code is amended to read:
14715. (a) (1) The department shall require any mental health plan that provides Medi-Cal specialty mental health services to enter into a memorandum of understanding with any Medi-Cal managed care plan that provides Medi-Cal health services to some of the same Medi-Cal recipients served by the mental health plan. The memorandum of understanding shall comply with applicable regulations.
(2) For purposes of this section, a “Medi-Cal managed care plan” means any prepaid health plan or Medi-Cal managed care plan contracting with the department to provide services to enrolled Medi-Cal beneficiaries under Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200), or Part 4 (commencing with Section 101525) of Division 101 of the Health and Safety Code.
(b) The department shall require the memorandum of understanding to include both of the following:
(1) A process or entity to be designated by the local mental health plan to receive notice of actions, denials, or deferrals from the Medi-Cal managed care plan, and to provide any additional information requested in the deferral notice as necessary for a medical necessity determination.
(2) A requirement that the local mental health plan respond by the close of the business day following the day the deferral notice is received.
(c) This section shall apply to any contracts entered into, amended, modified, extended, or renewed on or after January 1, 2001.