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SB-4 Developmental services: Medi-Cal: rate increases.(2015-2016)

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SB4:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2015–2016 2nd Ext.

Senate Bill No. 4


Introduced by Senators Nielsen and Stone
(Coauthors: Senators Anderson, Bates, Berryhill, Fuller, Gaines, Huff, Moorlach, Morrell, Nguyen, Runner, and Vidak)
(Coauthors: Assembly Members Maienschein, Mayes, and Steinorth)

July 16, 2015


An act to amend Sections 4681.6, 4689.8, 4691.9, and 4860, and to add Sections 4681.2, 4690.7, 4793, 4794, and 14105.194 to, the Welfare and Institutions Code, relating to human services financing, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 4, as introduced, Nielsen. Developmental services: Medi-Cal: rate increases.
The Lanterman Developmental Disabilities Services Act requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities. Under existing law, the regional centers purchase needed services for individuals with developmental disabilities through approved service providers or arrange for those services through other publicly funded agencies. Existing law establishes specified rates to be paid to certain service providers and the rates to be paid for certain developmental services. Existing law requires that rates to be paid to other developmental service providers either be set by the department or negotiated between the regional center and the service provider. Existing law prohibits certain provider rate increases, but authorizes increases to those rates as necessary to adjust employee wages to meet the state minimum wage law and to provide paid sick leave.
Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which basic health care services are provided to qualified low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law requires, except as otherwise provided, Medi-Cal provider payments to be reduced, as specified.
This bill would, to the extent that General Fund revenues for the 2014–15 fiscal year exceed the revenues estimated for that fiscal year in the Budget Act of 2015 and that General Fund revenues for the 2015–16 fiscal year are expected to exceed the revenues estimated for that fiscal year in the Budget Act of 2015, appropriate certain sums to the State Department of Developmental Services to increase rates for certain developmental service providers and to increase regional center operating budgets, and appropriate certain sums to the State Department of Health Care Services for the purpose of increasing Medi-Cal provider rates for providers whose rates were reduced. The bill would require the Director of Finance to determine the percentage increases to be provided to developmental service providers, regional center operating budgets, and Medi-Cal providers based on the amount by which General Fund revenues exceed, or are expected to exceed, the revenues budgeted for the 2014–15 and 2015–16 fiscal years. The bill would make the rate increases, if any, retroactive to July 1, 2015.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 (a) The Legislature finds and declares that the Budget Act of 2015 did not prioritize community services for Californians with intellectual or developmental disabilities or better access to care for Medi-Cal recipients.
(b) Therefore, it is the intent of the Legislature that unanticipated General Fund revenues received by the state be used to increase funding for community services provided to individuals with intellectual or developmental disabilities and to increase reimbursement rates for Medi-Cal providers.

SEC. 2.

 Section 4681.2 is added to the Welfare and Institutions Code, to read:

4681.2.
 Notwithstanding any other law, the department shall increase the rates set for community care facilities serving persons with developmental disabilities to implement the rate increase or increases, if any, required by Section 4793.

SEC. 3.

 Section 4681.6 of the Welfare and Institutions Code is amended to read:

4681.6.
 (a) Notwithstanding any other law or regulation, commencing July 1, 2008:
(1) A regional center shall not pay an existing residential service provider, for services where rates are determined through a negotiation between the regional center and the provider, a rate higher than the rate in effect on June 30, 2008, unless the increase is required by a contract between the regional center and the vendor that is in effect on June 30, 2008, or the regional center demonstrates that the approval is necessary to protect the consumer’s health or safety and the department has granted prior written authorization.
(2) A regional center shall not negotiate a rate with a new residential service provider, for services where rates are determined through a negotiation between the regional center and the provider, that is higher than the regional center’s median rate for the same service code and unit of service, or the statewide median rate for the same service code and unit of service, whichever is lower. The unit of service designation shall conform with an existing regional center designation or, if none exists, a designation used to calculate the statewide median rate for the same service. The regional center shall annually certify to the department its median rate for each negotiated rate service code, by designated unit of service. This certification shall be subject to verification through the department’s biennial fiscal audit of the regional center.
(b) Notwithstanding subdivision (a), commencing July 1, 2014, regional centers may negotiate a rate adjustment with residential service providers regarding rates that are otherwise restricted pursuant to subdivision (a), if the adjustment is necessary in order to pay employees no less than the minimum wage as established by Section 1182.12 of the Labor Code, as amended by Chapter 351 of the Statutes of 2013, and only for the purpose of adjusting payroll costs associated with the minimum wage increase. The rate adjustment shall be specific to the unit of service designation that is affected by the increased minimum wage, shall be specific to payroll costs associated with any increase necessary to adjust employee pay only to the extent necessary to bring pay into compliance with the increased state minimum wage, and shall not be used as a general wage enhancement for employees paid above the minimum wage. Regional centers shall maintain documentation on the process to determine, and the rationale for granting, any rate adjustment associated with the minimum wage increase.
(c) Notwithstanding subdivision (a), commencing July 1, 2015, regional centers may negotiate a rate adjustment with residential service providers regarding rates that are otherwise restricted pursuant to subdivision (a), if the adjustment is necessary to implement Article 1.5 (commencing with Section 245) of Chapter 1 of Part 1 of Division 2 of the Labor Code, as added by Chapter 317 of the Statutes of 2014. The rate adjustment may be applied only if a minimum of 24 hours or three days of paid sick leave per year was not a benefit provided to employees as of June 30, 2015, and shall be specific to payroll costs associated with any increase necessary to compensate an employee up to a maximum of 24 hours or three days of paid sick leave in each year of employment.
(d) Notwithstanding subdivision (a), regional centers shall increase the rates paid to residential service providers, for services where rates are determined through a negotiation between the regional center and the provider, to implement the rate increase or increases, if any, required by Section 4793.

(d)

(e) For purposes of this section, “residential service provider” includes Adult Residential Facilities for Persons with Special Health Care Needs, as described in Section 4684.50.

(e)

(f) This section shall not apply to those services for which rates are determined by the State Department of Health Care Services, or the State Department of Developmental Services, or are usual and customary.

SEC. 4.

 Section 4689.8 of the Welfare and Institutions Code is amended to read:

4689.8.
 (a) Notwithstanding any other provision of law or regulation, commencing July 1, 2008:

(a)No

(1) A regional center may shall not pay an existing supported living service provider, for services where rates are determined through a negotiation between the regional center and the provider, a rate higher than the rate in effect on June 30, 2008, unless the increase is required by a contract between the regional center and the vendor that is in effect on June 30, 2008, or the regional center demonstrates that the approval is necessary to protect the consumer’s health or safety and the department has granted prior written authorization.

(b)No

(2) A regional center may shall not negotiate a rate with a new supported living service provider, for services where rates are determined through a negotiation between the regional center and the provider, that is higher than the regional center’s median rate for the same service code and unit of service, or the statewide median rate for the same service code and unit of service, whichever is lower. The unit of service designation shall conform with an existing regional center designation or, if none exists, a designation used to calculate the statewide median rate for the same service. The regional center shall annually certify to the State Department of Developmental Services its median rate for each negotiated rate service code, by designated unit of service. This certification shall be subject to verification through the department’s biennial fiscal audit of the regional center.
(b) Notwithstanding subdivision (a), regional centers shall increase the rates paid to supported living service providers, for services where rates are determined through a negotiation between the regional center and the provider, to implement the rate increase or increases, if any, required by Section 4793.

SEC. 5.

 Section 4690.7 is added to the Welfare and Institutions Code, to read:

4690.7.
 Notwithstanding any other law, the department shall increase the rates set for nonresidential service providers to implement the rate increase or increases, if any, required by Section 4793.

SEC. 6.

 Section 4691.9 of the Welfare and Institutions Code is amended to read:

4691.9.
 (a) Notwithstanding any other law or regulation, commencing July 1, 2008:
(1) A regional center shall not pay an existing service provider, for services where rates are determined through a negotiation between the regional center and the provider, a rate higher than the rate in effect on June 30, 2008, unless the increase is required by a contract between the regional center and the vendor that is in effect on June 30, 2008, or the regional center demonstrates that the approval is necessary to protect the consumer’s health or safety and the department has granted prior written authorization.
(2) A regional center shall not negotiate a rate with a new service provider, for services where rates are determined through a negotiation between the regional center and the provider, that is higher than the regional center’s median rate for the same service code and unit of service, or the statewide median rate for the same service code and unit of service, whichever is lower. The unit of service designation shall conform with an existing regional center designation or, if none exists, a designation used to calculate the statewide median rate for the same service. The regional center shall annually certify to the State Department of Developmental Services its median rate for each negotiated rate service code, by designated unit of service. This certification shall be subject to verification through the department’s biennial fiscal audit of the regional center.
(b) Notwithstanding subdivision (a), commencing July 1, 2014, regional centers may negotiate a rate adjustment with providers regarding rates if the adjustment is necessary in order to pay employees no less than the minimum wage as established by Section 1182.12 of the Labor Code, as amended by Chapter 351 of the Statutes of 2013, and only for the purpose of adjusting payroll costs associated with the minimum wage increase. The rate adjustment shall be specific to the unit of service designation that is affected by the increased minimum wage, shall be specific to payroll costs associated with any increase necessary to adjust employee pay only to the extent necessary to bring pay into compliance with the increased state minimum wage, and shall not be used as a general wage enhancement for employees paid above the increased minimum wage. Regional centers shall maintain documentation on the process to determine, and the rationale for granting, any rate adjustment associated with the minimum wage increase.
(c) Notwithstanding any other law or regulation, commencing January 1, 2015, rates for personal assistance and supported living services in effect on December 31, 2014, shall be increased by 5.82 percent, subject to funds specifically appropriated for this increase for costs due to changes in federal regulations implementing the federal Fair Labor Standards Act of 1938 (29 U.S.C. Sec. 201 et seq.). The increase shall be applied as a percentage, and the percentage shall be the same for all applicable providers. As used in this subdivision, both of the following definitions shall apply:
(1) “Personal assistance” is limited only to those services provided by vendors classified by the regional center as personal assistance providers, pursuant to the miscellaneous services provisions contained in Title 17 of the California Code of Regulations.
(2) “Supported living services” are limited only to those services defined as supported living services in Title 17 of the California Code of Regulations.
(d) Notwithstanding subdivision (a), commencing July 1, 2015, regional centers may negotiate a rate adjustment with existing service providers for services for which rates are determined through negotiation between the regional center and the provider, if the adjustment is necessary to implement Article 1.5 (commencing with Section 245) of Chapter 1 of Part 1 of Division 2 of the Labor Code, as added by Chapter 317 of the Statutes of 2014. The rate adjustment may be applied only if a minimum of 24 hours or three days of paid sick leave per year was not a benefit provided to employees as of June 30, 2015, and shall be specific to payroll costs associated with any increase necessary to compensate an employee up to a maximum of 24 hours or three days of paid sick leave in each year of employment.
(e) Notwithstanding subdivision (a), regional centers shall increase the rates paid to service providers, for services where rates are determined through a negotiation between the regional center and the provider, to implement the rate increase, if any, required by Section 4793.

(e)

(f) This section shall not apply to those services for which rates are determined by the State Department of Health Care Services, or the State Department of Developmental Services, or are usual and customary.

SEC. 7.

 Section 4793 is added to the Welfare and Institutions Code, immediately following Section 4792, to read:

4793.
 (a) (1) On or before January 10, 2016, the Director of Finance shall calculate the sum of the amount by which General Fund revenues for the 2014–15 fiscal year exceed the revenue estimated for that fiscal year calculated at the time of the Budget Act of 2015 and the amount by which General Fund revenues for the 2015–16 fiscal year are expected to exceed the revenue estimated for that fiscal year in the Budget Act of 2015.
(2) (A) If the amount calculated pursuant to paragraph (1), after subtracting the amounts required to satisfy the obligations arising from Sections 8 and 20 of Article XVI of the California Constitution, is less than or equal to the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B), the entire amount is appropriated to the State Department of Developmental Services for the purpose of providing rate increases to service providers and increasing regional center operating budgets, the amount of which shall be calculated pursuant to subparagraph (B).
(B) The Director of Finance shall, in consultation with the State Department of Developmental Services, calculate the percentage rate increase to be provided to community care facilities serving persons with developmental disabilities, residential service providers, supported living service providers, nonresidential service providers, other service providers, and supported employment services providers, and the increase to regional center operating budgets. In calculating the percentage increase, the director shall ensure that the total cost of the rate increases for all service providers and the increase in regional center operating budgets equals the amount calculated pursuant to paragraph (1) and that the percentage increase for each provider type and regional center operating budget is the same.
(3) (A) If the amount calculated pursuant to paragraph (1), after subtracting the amounts required to satisfy the obligations arising from Sections 8 and 20 of Article XVI of the California Constitution, is more than the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2), then the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2) is appropriated to the State Department of Developmental Services for the purpose of providing rate increases to service providers and increasing regional center operating budgets, the amount of which shall be calculated pursuant to subparagraph (B), and the remainder of the amount, up to the amount necessary to restore the rates paid to affected Medi-Cal providers to the levels in effect prior to the reductions imposed by Sections 14105.07, 14105.191, 14105.192, and 14105.93, is appropriated to the State Department of Health Care Services for the purpose of increasing Medi-Cal provider rates, the amount of which shall be calculated pursuant to subparagraph (C).
(B) The Director of Finance shall, in consultation with the State Department of Developmental Services, calculate the percentage rate increase to be provided to community care facilities serving persons with developmental disabilities, residential service providers, supported living service providers, nonresidential service providers, other service providers, and supported employment service providers, and the increase to regional center operating budgets. In calculating the percentage increase, the director shall ensure that the total cost of the rate increases for all service providers and the increase in regional center operating budgets is no greater than the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2) and that the percentage increase for each provider type and regional center operating budget is the same.
(C) The Director of Finance shall, in consultation with the State Department of Health Care Services, calculate the percentage rate increase to be provided to Medi-Cal providers for whom rates were reduced pursuant to Section 14105.07, 14105.191, 14105.192, or 14105.93. In calculating the percentage rate increase, the director shall ensure that the total cost of the rate increase for all providers equals the amount calculated pursuant to paragraph (1) minus the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2), but no more than the amount necessary to restore the rates paid to affected Medi-Cal providers to the levels in effect prior to the reductions imposed by Sections 14105.07, 14105.191, 14105.192, and 14105.93, and that the percentage increase is equitable among eligible Medi-Cal providers and managed care health plans that contract with the State Department of Health Care Services pursuant to Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9.
(b) (1) On or before May 14, 2016, the Director of Finance shall recalculate the sum of the amount by which General Fund revenues for the 2014–15 fiscal year exceed the revenue estimated for that fiscal year calculated at the time of the Budget Act of 2015 and the amount by which General Fund revenues for the 2015–16 fiscal year are expected to exceed the revenue estimated for that fiscal year in the Budget Act of 2015.
(2) If the amount calculated pursuant to paragraph (1), after subtracting the amounts required to satisfy the obligations arising from Sections 8 and 20 of Article XVI of the California Constitution, is greater than the amount calculated pursuant to paragraph (1) of subdivision (a), but is less than or equal to the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2) of subdivision (a), the entire amount, less the amount appropriated pursuant to subparagraph (A) of paragraph (2) of subdivision (a), is appropriated to the State Department of Developmental Services for the purpose of providing rate increases to service providers and increasing regional center operating budgets, the amount of which shall be calculated pursuant to subparagraph (B) of paragraph (2) of subdivision (a), except that the total cost of the rate increases for all service providers and the increase in regional center operating budgets shall equal the amount calculated pursuant to this paragraph.
(3) If the amount calculated pursuant to paragraph (1), after subtracting the amounts required to satisfy the obligations arising from Sections 8 and 20 of Article XVI of the California Constitution, is greater than the amount calculated pursuant to paragraph (1) of subdivision (a), and is more than the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2) of subdivision (a), then the amount necessary to provide a 10 percent rate increase to the developmental services providers identified in subparagraph (B) of paragraph (2) of subdivision (a), less any amount appropriated pursuant to subparagraph (A) of paragraph (2) of subdivision (a) or subparagraph (A) of paragraph (3) of subdivision (a), is appropriated to the State Department of Developmental Services for the purpose of providing rate increases to service providers and increasing regional center operating budgets, the amount of which shall be calculated pursuant to subparagraph (B) of paragraph (3) of subdivision (a), except that the total cost of the rate increases for all service providers and the increase in regional center operating budgets shall equal the amount appropriated to the State Department of Developmental Services pursuant to this paragraph. The remainder of the amount, up to the amount necessary to restore the rates paid to affected Medi-Cal providers to the levels in effect prior to the reductions imposed by Sections 14105.07, 14105.191, 14105.192, and 14105.93, less any amount appropriated pursuant to subparagraph (A) of paragraph (3) of subdivision (a), is appropriated to the State Department of Health Care Services for the purpose of increasing Medi-Cal provider rates for providers for whom rates were reduced pursuant to Sections 14105.07, 14105.191, 14105.192, and 14105.93, the amount of which shall be calculated pursuant to subparagraph (C) of paragraph (3) of subdivision (a), except that the total cost of the rate increase for all providers shall equal the amount appropriated to the State Department of Health Care Services pursuant to this paragraph.
(c) The rate increases calculated and provided pursuant to this section, if any, shall be retroactive to July 1, 2015.

SEC. 8.

 Section 4794 is added to the Welfare and Institutions Code, immediately following Section 4793, to read:

4794.
 Notwithstanding any other law, the department shall increase funding provided to a regional center for the regional center’s operating budget to implement the rate increase or increases, if any, required by Section 4793.

SEC. 9.

 Section 4860 of the Welfare and Institutions Code is amended to read:

4860.
 (a) (1) The Except as provided in subdivision (f), the hourly rate for supported employment services provided to consumers receiving individualized services shall be thirty dollars and eighty-two cents ($30.82).
(2) Job coach hours spent in travel to consumer worksites may be reimbursable for individualized services only when the job coach travels from the vendor’s headquarters to the consumer’s worksite or from one consumer’s worksite to another, and only when the travel is one way.
(b) The Except as provided in subdivision (f), the hourly rate for group services shall be thirty dollars and eighty-two cents ($30.82), regardless of the number of consumers served in the group. Consumers in a group shall be scheduled to start and end work at the same time, unless an exception that takes into consideration the consumer’s compensated work schedule is approved in advance by the regional center. The department, in consultation with stakeholders, shall adopt regulations to define the appropriate grounds for granting these exceptions. When the number of consumers in a supported employment placement group drops to fewer than the minimum required in subdivision (r) of Section 4851, the regional center may terminate funding for the group services in that group, unless, within 90 days, the program provider adds one or more regional centers, or Department of Rehabilitation-funded supported employment consumers to the group.
(c) Job coaching hours for group services shall be allocated on a prorated basis between a regional center and the Department of Rehabilitation when regional center and Department of Rehabilitation consumers are served in the same group.
(d) When Section 4855 applies, fees shall be authorized for the following:
(1) A three-hundred-sixty-dollar ($360) fee shall be paid to the program provider upon intake of a consumer into a supported employment program. No fee shall be paid if that consumer completed a supported employment intake process with that same supported employment program within the previous 12 months.
(2) A seven-hundred-twenty-dollar ($720) fee shall be paid upon placement of a consumer in an integrated job, except that no fee shall be paid if that consumer is placed with another consumer or consumers assigned to the same job coach during the same hours of employment.
(3) A seven-hundred-twenty-dollar ($720) fee shall be paid after a 90-day retention of a consumer in a job, except that no fee shall be paid if that consumer has been placed with another consumer or consumers, assigned to the same job coach during the same hours of employment.
(e) Notwithstanding paragraph (4) of subdivision (a) of Section 4648, the regional center shall pay the supported employment program rates established by this section.
(f) The department shall increase the hourly rates established pursuant to subdivisions (a) and (b) to implement the rate increase or increases, if any, required by Section 4793.

SEC. 10.

 Section 14105.194 is added to the Welfare and Institutions Code, to read:

14105.194.
 (a) Notwithstanding Sections 14105.07, 14105.191, 14105.192, and 14105.193, payments to providers and managed care health plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200) shall be increased pursuant to the operation of Section 4793.
(b) The director shall implement this section to the maximum extent permitted by federal law and for the maximum time period for which the director obtains federal approval for federal financial participation for the increases provided for in Section 4793 and this section.
(c) The director shall promptly seek all necessary federal approvals to implement this section.

SEC. 11.

 The Legislature declares that the changes made by this act are not intended to result in the substantial impairment of any contract. To the extent any contract would be substantially impaired as a result of the application of any change made by this act, it is the intent of the Legislature that the change apply only to contracts renewed or entered into on or after the date this act becomes effective.