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AB-2164 Telehealth.(2019-2020)

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Date Published: 05/11/2020 09:00 PM
AB2164:v98#DOCUMENT

Revised  May 26, 2020
Amended  IN  Assembly  May 11, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2164


Introduced by Assembly Member Members Robert Rivas and Salas
(Principal coauthor: Assembly Member Wood)
(Coauthors: Assembly Members Flora, Eduardo Garcia, Mathis, Mayes, and Salas Waldron, and Luz Rivas)
(Coauthor: Senator Wilk)

February 11, 2020


An act to add Article 10 (commencing with Section 100580) to Chapter 3 of Part 1 of Division 101 of the Health and Safety Code, and to amend Section 14132.100 of, and to add Section 14132.726 to, the Welfare and Institutions Code, relating to health care.


LEGISLATIVE COUNSEL'S DIGEST


AB 2164, as amended, Robert Rivas. E-Consult Services and Telehealth Assistance Program. Telehealth.
Existing law establishes the State Department of Health Care Services, and requires the department to administer various health programs. Existing law authorizes the department to award grants for specified programs, including studies of various diseases and treatment methodologies.
Existing law provides for the Medi-Cal program, which is administered by the department, under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services and rural health clinic (RHC) services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. FQHC and RHC services are reimbursed, to the extent that federal financial participation is obtained, to providers on a per-visit basis, and a “visit” is defined as a face-to-face encounter between a patient of an FQHC or RHC and specified health care professionals, including dental providers.
Existing law prohibits a requirement of in-person contact between a health care provider and a Medi-Cal patient when the service may be provided by telehealth, and, for purposes of telehealth, prohibits the department from limiting the type of setting where Medi-Cal services are provided. Existing law authorizes, to the extent that federal financial participation is available, the use of health care services by store and forward under the Medi-Cal program, subject to billing and reimbursement policies developed by the department, and prohibits a requirement of in-person contact between a health care provider and a Medi-Cal patient when these services are provided by store and forward.
This bill would provide that an FQHC or RHC “visit” includes an encounter between an FQHC or RHC patient and a health care provider using telehealth by synchronous real time or asynchronous store and forward. The bill would clarify, for purposes of an FQHC or RHC visit, that face-to-face contact between a health care provider and a patient is not required for an FQHC or RHC to bill for telehealth by synchronous real time or asynchronous store and forward if specified requirements are met, including that a billable provider in the Medi-Cal program, and who is employed by the FQHC or RHC, supervises or provides the services for that patient via telehealth by synchronous real time or asynchronous store and forward.
This bill would also create the E-Consult Services and Telehealth Assistance Program within the department to award grants, contingent upon an appropriation, to health center-controlled networks, health centers, and rural health clinics to conduct projects to implement and test the effectiveness of e-consult services and related telehealth services. The bill would require a health center-controlled network, health center, or rural health clinic to meet specified criteria to be eligible for a grant, and would require a project awarded a grant to address specified objectives. The bill would limit an awarded grant to a term of no more than 5 years. No later than 180 days after the completion of the last grant-funded projects, the bill would require the department to submit a report to the Legislature that, among other things, provides an overview of supported projects and identifies successes and failures.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 The Legislature finds and declares the following:
(a) Telehealth, or the delivery of health care services through electronic information technology, is an effective means to ensure patients, regardless of location, can access safe and effective health care. One method of telehealth to better serve patients and improve primary care providers’ scope of practice are e-consults, which are asynchronous electronic consultations between health care providers—often a specialist and primary care provider.
(b) E-consults help patients avoid long wait times, traveling great distances, and missed income or childcare expenditures, issues that have a greater impact on the safety net population. Growth of e-consult services improve access to specialty care, expand specialists’ bandwidth, and further educate primary care physicians at relatively low cost. To facilitate the adoption and continued use of e-consult services for Medi-Cal providers, the funding support designated in this bill is necessary to obtain equipment and technology, develop workflows, and provide training. This funding is the purpose of this legislation.
(c) To further avoid health inequities, the state shall ensure coverage and reimbursement parity is provided to both Medi-Cal primary care provider and Medi-Cal specialty care provider grant participants at distant sites who engage in asynchronous electronic consultations, for the purposes of securing the medical opinion and advice of specialty Medi-Cal providers. This reimbursement should be provided regardless of modality or setting.

SEC. 2.

 Article 10 (commencing with Section 100580) is added to Chapter 3 of Part 1 of Division 101 of the Health and Safety Code, to read:
Article  10. E-Consult Services and Telehealth Assistance Program

100580.
 The E-Consult Services and Telehealth Assistance Program is hereby created within the State Department of Health Care Services.

100581.
 For purposes of this article:
(a) “Certified EHR technology” means a qualified electronic health record as defined in Section 300jj(1) of Title 42 of the United States Code.
(b) “E-consult service” means synchronous or asynchronous, consultative, health-care-provider-to-health-care-provider communications that occur within a shared certified EHR technology or secure internet-based platform and are primarily intended to provide specialty expertise to treating clinicians without requiring a direct interaction between the patient and the specialist. An e-consult service ordinarily involves a treating clinician sending information regarding the patient and a consultation request to a specialist, who may then respond in any of a number of ways, including providing requested feedback, asking for additional information, recommending certain studies or examinations, or initiating the scheduling of an appointment.
(c) “Health center” means a center as defined in Section 254b(a) of Title 42 of the United States Code.
(d) “Health center-controlled network” means a network that is owned and controlled by health centers, as described in Section 254b(e)(1)(C) of Title 42 of the United States Code.
(e) “Primary care physician” is a physician who has the responsibility to provide initial and primary care to patients, to maintain the continuity of patient care, and to initiate a referral for specialist care. A primary care physician shall be either a physician who has limited their practice of medicine to general practice or who is a board-certified or board-eligible internist, pediatrician, obstetrician-gynecologist, or family practitioner.
(f) “Specialist” means a physician who is board certified or board eligible in the specialty of medical care provided.
(g) “Related telehealth services” means telehealth services arising out of or incident to an e-consult service, such as laboratory tests, diagnostic imaging, or a later interaction between a specialist and a patient.
(h) “Rural health clinic” means a clinic as defined in Section 1395x(aa)(2) of Title 42 of the United States Code.
(i) “Telehealth” means the mode of delivering health care services and public health via information and communication technologies to facilitate the diagnosis, consultation, treatment, education, care management, and self-management of a patient’s health care. Telehealth facilitates patient self-management and caregiver support for patients and includes synchronous interactions and asynchronous store and forward transfers.

100582.
 (a) The department may award grants to eligible health center-controlled networks, health centers, and rural health clinics to conduct projects to implement and test the effectiveness of e-consult services and related telehealth services furnished at those networks, centers, and clinics for purposes of addressing the objectives described in subdivision (b). Funding for the grant program shall be contingent upon an appropriation in the annual Budget Act.
(b) A project conducted using a grant awarded pursuant to subdivision (a) shall address the following objectives:
(1) Improving patient access to specialty care.
(2) Reducing specialty care patient wait times.
(3) Reducing patient specialty referrals.
(4) Reducing patient miles traveled for specialty care consultations.
(5) Increasing support for primary care physicians and other providers of primary care as demonstrated by job satisfaction measures.
(6) Increasing patient satisfaction as demonstrated by quality surveys.
(7) Increasing health care cost savings.
(8) Other objectives the department may identify.
(c) A grant awarded pursuant to subdivision (a) shall be for a term of no more than five years.
(d) Grant funding awarded to a health center-controlled network, health center, or rural health clinic pursuant to subdivision (a) shall only be used for the following:
(1) Conducting assessments of a participating facility’s infrastructure, including broadband, equipment, and software, clinical objectives, and staffing plans.
(2) Based on assessment findings, developing and assisting in the execution of equipment and software procurement, defining clinical objectives, developing adequate staffing plans, and implementing e-consult services and related telehealth services program plans.
(3) Training participating facility staff to properly utilize technology and implement programs.
(4) Providing clinical workflow training to support program implementation.
(5) Providing integrated certified EHR technology capabilities to support live video, if applicable, and e-consult services.
(6) Integrating the facility with live e-consult service support providers and networks that meet the patient objectives of the network, center, or clinic.
(7) Procuring appropriate information technology and undertaking minor alterations of physical space.
(8) Otherwise carrying out the project to address the objectives described in subdivision (b).
(e) A location of a health center or rural health clinic shall qualify to participate in a program established pursuant to this section if the center or clinic can sufficiently demonstrate that the location meets both of the following criteria:
(1) Lacks sufficient access to care provided by specialists.
(2) Has not already implemented a program of e-consult services and related telehealth services similar to that described in this section.
(f) To be eligible to receive a grant pursuant to subdivision (a), an entity shall:
(1) Be either of the following:
(A) A health center-controlled network that demonstrates, to the satisfaction of the department, all of the following:
(i) Sufficient expertise and experience in the successful provision of the technical and other assistance required for health centers and rural health clinics to conduct a project in accordance with this section.
(ii) Evidence of sufficient binding participation commitments received from eligible health centers and rural health clinics.
(iii) The ability to assist eligible health centers and rural health clinics to conduct e-consult services with specialists and related telehealth services.
(iv) A likelihood of successfully accomplishing the program objectives as identified in subdivision (b).
(B) A health center or rural health clinic that demonstrates, to the satisfaction of the department, all of the following:
(i) Sufficient expertise and ability to implement on its own behalf the technical and other assistance required to conduct a project in accordance with this section.
(ii) A likelihood of successfully implementing a program of e-consult services with specialists and related telehealth services.
(iii) A likelihood of successfully accomplishing the program objectives as identified in subdivision (b).
(2) Submit to the department an application in a form and manner as determined by the department. An application shall demonstrate, to the satisfaction of the department, all of the following:
(A) In the case of an applicant that is a health center-controlled network, the intention of a sufficient minimum number of eligible health centers to participate in the program through the network and a plan for recruiting additional centers to participate.
(B) The qualification of proposed facility locations that will participate in the program.
(C) The requisite experience, expertise, and capacity.
(D) The likelihood of successfully accomplishing the program objectives as identified in subdivision (b).
(E) The internal program metrics that will be employed to demonstrate satisfaction of the program objectives and the information to be collected and provided to the department as necessary to conduct a program evaluation.
(g) No later than 180 days after the date of completion of the last projects funded under this section, the department shall submit to the Legislature a report, including an evaluation, on the projects that addresses all of the following:
(1) An overview of supported projects and identification of areas of success and failure.
(2) Policies, practices, and organizational approaches that either facilitate or impede the effective use of e-consult services, including personnel training and support, technology usability, workflow, and provider communication.
(3) Relative effectiveness of consultations provided by specialists in improving outcomes, quality of care, and efficiency with respect to different specialties, clinical conditions, complexity, patient types, or other issues.
(4) The extent to which information shared in the e-consult services process is sufficient, accurate, and actionable to effectively facilitate care improvement, and whether those bidirectional information flows can be standardized.
(5) The extent to which e-consults facilitate continuity of care.
(6) Any issues arising related to maintaining the privacy of personal health information, ensuring cybersecurity, and other information security issues.
(7) The extent to which e-consult services contribute to improved health outcomes and metrics that can facilitate that evaluation.
(8) Any unintended or adverse results from utilizing e-consult services.
(h) The report required to be submitted pursuant to subdivision (g) shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 3.

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

14132.100.
 (a) The federally qualified health center services described in Section 1396d(a)(2)(C) of Title 42 of the United States Code are covered benefits.
(b) The rural health clinic services described in Section 1396d(a)(2)(B) of Title 42 of the United States Code are covered benefits.
(c) Federally qualified health center services and rural health clinic services shall be reimbursed on a per-visit basis in accordance with the definition of “visit” set forth in subdivision (g).
(d) Effective October 1, 2004, and on each October 1 thereafter, until no longer required by federal law, federally qualified health center (FQHC) and rural health clinic (RHC) per-visit rates shall be increased by the Medicare Economic Index applicable to primary care services in the manner provided for in Section 1396a(bb)(3)(A) of Title 42 of the United States Code. Prior to January 1, 2004, FQHC and RHC per-visit rates shall be adjusted by the Medicare Economic Index in accordance with the methodology set forth in the state plan in effect on October 1, 2001.
(e) (1) An FQHC or RHC may apply for an adjustment to its per-visit rate based on a change in the scope of services service provided by the FQHC or RHC. Rate changes based on a change in the scope of services service provided by an FQHC or RHC shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(2) Subject to the conditions set forth in subparagraphs (A) to (D), inclusive, of paragraph (3), a change in scope of service means any of the following:
(A) The addition of a new FQHC or RHC service that is not incorporated in the baseline prospective payment system (PPS) rate, or a deletion of an FQHC or RHC service that is incorporated in the baseline PPS rate.
(B) A change in service due to amended regulatory requirements or rules.
(C) A change in service resulting from relocating or remodeling an FQHC or RHC.
(D) A change in types of services due to a change in applicable technology and medical practice utilized by the center or clinic.
(E) An increase in service intensity attributable to changes in the types of patients served, including, but not limited to, populations with HIV or AIDS, or other chronic diseases, or homeless, elderly, migrant, or other special populations.
(F) Any changes in any of the services described in subdivision (a) or (b), or in the provider mix of an FQHC or RHC or one of its sites.
(G) Changes in operating costs attributable to capital expenditures associated with a modification of the scope of any of the services described in subdivision (a) or (b), including new or expanded service facilities, regulatory compliance, or changes in technology or medical practices at the center or clinic.
(H) Indirect medical education adjustments and a direct graduate medical education payment that reflects the costs of providing teaching services to interns and residents.
(I) Any changes in the scope of a project approved by the federal Health Resources and Services Administration (HRSA).
(3) A change in costs is not, in and of itself, a scope-of-service change, unless all of the following apply:
(A) The increase or decrease in cost is attributable to an increase or decrease in the scope of services service defined in subdivisions (a) and (b), as applicable.
(B) The cost is allowable under Medicare reasonable cost principles set forth in Part 413 (commencing with Section 413) of Subchapter B of Chapter 4 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(C) The change in the scope of services service is a change in the type, intensity, duration, or amount of services, or any combination thereof.
(D) The net change in the FQHC’s or RHC’s rate equals or exceeds 1.75 percent for the affected FQHC or RHC site. For FQHCs and RHCs that filed consolidated cost reports for multiple sites to establish the initial prospective payment reimbursement rate, the 1.75-percent threshold shall be applied to the average per-visit rate of all sites for the purposes of calculating the cost associated with a scope-of-service change. “Net change” means the per-visit rate change attributable to the cumulative effect of all increases and decreases for a particular fiscal year.
(4) An FQHC or RHC may submit requests for scope-of-service changes once per fiscal year, only within 90 days following the beginning of the FQHC’s or RHC’s fiscal year. Any approved increase or decrease in the provider’s rate shall be retroactive to the beginning of the FQHC’s or RHC’s fiscal year in which the request is submitted.
(5) An FQHC or RHC shall submit a scope-of-service rate change request within 90 days of the beginning of any FQHC or RHC fiscal year occurring after the effective date of this section, if, during the FQHC’s or RHC’s prior fiscal year, the FQHC or RHC experienced a decrease in the scope of services service provided that the FQHC or RHC either knew or should have known would have resulted in a significantly lower per-visit rate. If an FQHC or RHC discontinues providing onsite pharmacy or dental services, it shall submit a scope-of-service rate change request within 90 days of the beginning of the following fiscal year. The rate change shall be effective as provided for in paragraph (4). As used in this paragraph, “significantly lower” means an average per-visit rate decrease in excess of 2.5 percent.
(6) Notwithstanding paragraph (4), if the approved scope-of-service change or changes were initially implemented on or after the first day of an FQHC’s or RHC’s fiscal year ending in calendar year 2001, but before the adoption and issuance of written instructions for applying for a scope-of-service change, the adjusted reimbursement rate for that scope-of-service change shall be made retroactive to the date the scope-of-service change was initially implemented. Scope-of-service changes under this paragraph shall be required to be submitted within the later of 150 days after the adoption and issuance of the written instructions by the department, or 150 days after the end of the FQHC’s or RHC’s fiscal year ending in 2003.
(7) All references in this subdivision to “fiscal year” shall be construed to be references to the fiscal year of the individual FQHC or RHC, as the case may be.
(f) (1) An FQHC or RHC may request a supplemental payment if extraordinary circumstances beyond the control of the FQHC or RHC occur after December 31, 2001, and PPS payments are insufficient due to these extraordinary circumstances. Supplemental payments arising from extraordinary circumstances under this subdivision shall be solely and exclusively within the discretion of the department and shall not be subject to subdivision (l). These supplemental payments shall be determined separately from the scope-of-service adjustments described in subdivision (e). Extraordinary circumstances include, but are not limited to, acts of nature, changes in applicable requirements in the Health and Safety Code, changes in applicable licensure requirements, and changes in applicable rules or regulations. Mere inflation of costs alone, absent extraordinary circumstances, shall not be grounds for supplemental payment. If an FQHC’s or RHC’s PPS rate is sufficient to cover its overall costs, including those associated with the extraordinary circumstances, then a supplemental payment is not warranted.
(2) The department shall accept requests for supplemental payment at any time throughout the prospective payment rate year.
(3) Requests for supplemental payments shall be submitted in writing to the department and shall set forth the reasons for the request. Each request shall be accompanied by sufficient documentation to enable the department to act upon the request. Documentation shall include the data necessary to demonstrate that the circumstances for which supplemental payment is requested meet the requirements set forth in this section. Documentation shall include both of the following:
(A) A presentation of data to demonstrate reasons for the FQHC’s or RHC’s request for a supplemental payment.
(B) Documentation showing the cost implications. The cost impact shall be material and significant, two hundred thousand dollars ($200,000) or 1 percent of a facility’s total costs, whichever is less.
(4) A request shall be submitted for each affected year.
(5) Amounts granted for supplemental payment requests shall be paid as lump-sum amounts for those years and not as revised PPS rates, and shall be repaid by the FQHC or RHC to the extent that it is not expended for the specified purposes.
(6) The department shall notify the provider of the department’s discretionary decision in writing.
(g) (1) An FQHC or RHC “visit” means a face-to-face encounter between an FQHC or RHC patient and a physician, physician assistant, nurse practitioner, certified nurse-midwife, clinical psychologist, licensed clinical social worker, or a visiting nurse. For purposes of this section, “physician” shall be interpreted in a manner consistent with the federal Centers for Medicare and Medicaid Services’ Medicare Rural Health Clinic and Federally Qualified Health Center Manual (Publication 27), or its successor, only to the extent that it defines the professionals whose services are reimbursable on a per-visit basis and not as to the types of services that these professionals may render during these visits and shall include a physician and surgeon, osteopath, podiatrist, dentist, optometrist, and chiropractor. A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a comprehensive perinatal practitioner, as defined in Section 51179.7 of Title 22 of the California Code of Regulations, providing comprehensive perinatal services, a four-hour day of attendance at an adult day health care center, and any other provider identified in the state plan’s definition of an FQHC or RHC visit.
(2) (A) A visit shall also include a face-to-face encounter between an FQHC or RHC patient and a dental hygienist, a dental hygienist in alternative practice, or a marriage and family therapist.
(B) Notwithstanding subdivision (e), if an FQHC or RHC that currently includes the cost of the services of a dental hygienist in alternative practice, or a marriage and family therapist for the purposes of establishing its FQHC or RHC rate chooses to bill these services as a separate visit, the FQHC or RHC shall apply for an adjustment to its per-visit rate, and, after the rate adjustment has been approved by the department, shall bill these services as a separate visit. However, multiple encounters with dental professionals or marriage and family therapists that take place on the same day shall constitute a single visit. The department shall develop the appropriate forms to determine which FQHC’s or RHC’s rates shall be adjusted and to facilitate the calculation of the adjusted rates. An FQHC’s or RHC’s application for, or the department’s approval of, a rate adjustment pursuant to this subparagraph shall not constitute a change in scope of service within the meaning of subdivision (e). An FQHC or RHC that applies for an adjustment to its rate pursuant to this subparagraph may continue to bill for all other FQHC or RHC visits at its existing per-visit rate, subject to reconciliation, until the rate adjustment for visits between an FQHC or RHC patient and a dental hygienist, a dental hygienist in alternative practice, or a marriage and family therapist has been approved. Any approved increase or decrease in the provider’s rate shall be made within six months after the date of receipt of the department’s rate adjustment forms pursuant to this subparagraph and shall be retroactive to the beginning of the fiscal year in which the FQHC or RHC submits the request, but in no case shall the effective date be earlier than January 1, 2008.
(C) An FQHC or RHC that does not provide dental hygienist, dental hygienist in alternative practice, or marriage and family therapist services, and later elects to add these services and bill these services as a separate visit, shall process the addition of these services as a change in scope of service pursuant to subdivision (e).
(3) Notwithstanding any other provision of this section, no later than July 1, 2018, a visit shall include a marriage and family therapist.
(4) A visit shall also include an encounter between an FQHC or RHC patient and a health care provider using telehealth, either in synchronous real time or asynchronous store and forward, as described in Section 14132.726.
(h) If FQHC or RHC services are partially reimbursed by a third-party payer, such as a managed care entity, as defined in Section 1396u-2(a)(1)(B) of Title 42 of the United States Code, the Medicare Program, or the Child Health and Disability Prevention (CHDP) Program, the department shall reimburse an FQHC or RHC for the difference between its per-visit PPS rate and receipts from other plans or programs on a contract-by-contract basis and not in the aggregate, and may not include managed care financial incentive payments that are required by federal law to be excluded from the calculation.
(i) (1) Provided that the following entities are not operating as intermittent clinics, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, each entity shall have its reimbursement rate established in accordance with one of the methods outlined in paragraph (2) or (3), as selected by the FQHC or RHC:
(A) An entity that first qualifies as an FQHC or RHC in 2001 or later.
(B) A newly licensed facility at a new location added to an existing FQHC or RHC.
(C) An entity that is an existing FQHC or RHC that is relocated to a new site.
(2) (A) An FQHC or RHC that adds a new licensed location to its existing primary care license under paragraph (1) of subdivision (b) of Section 1212 of the Health and Safety Code may elect to have the reimbursement rate for the new location established in accordance with paragraph (3), or notwithstanding subdivision (e), an FQHC or RHC may choose to have one PPS rate for all locations that appear on its primary care license determined by submitting a change in scope of service scope-of-service request if both of the following requirements are met:
(i) The change in scope of service scope-of-service request includes the costs and visits for those locations for the first full fiscal year immediately following the date the new location is added to the FQHC’s or RHC’s existing licensee.
(ii) The FQHC or RHC submits the change in scope of service scope-of-service request within 90 days after the FQHC’s or RHC’s first full fiscal year.
(B) The FQHC’s or RHC’s single PPS rate for those locations shall be calculated based on the total costs and total visits of those locations and shall be determined based on the following:
(i) An audit in accordance with Section 14170.
(ii) Rate changes based on a change in scope of service scope-of-service request shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successors.
(iii) Any approved increase or decrease in the provider’s rate shall be retroactive to the beginning of the FQHC’s or RHC’s fiscal year in which the request is submitted.
(C) Except as specified in subdivision (j), this paragraph does not apply to a location that was added to an existing primary care clinic license by the State Department of Public Health, whether by a regional district office or the centralized application unit, prior to January 1, 2017.
(3) If an FQHC or RHC does not elect to have the PPS rate determined by a change in scope of service scope-of-service request, the FQHC or RHC shall have the reimbursement rate established for any of the entities identified in paragraph (1) or (2) in accordance with one of the following methods at the election of the FQHC or RHC:
(A) The rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or adjacent area with a similar caseload.
(B) In the absence of three comparable FQHCs or RHCs with a similar caseload, the rate may be calculated on a per-visit basis in an amount that is equal to the average of the per-visit rates of three comparable FQHCs or RHCs located in the same or an adjacent service area, or in a reasonably similar geographic area with respect to relevant social, health care, and economic characteristics.
(C) At a new entity’s one-time election, the department shall establish a reimbursement rate, calculated on a per-visit basis, that is equal to 100 percent of the projected allowable costs to the FQHC or RHC of furnishing FQHC or RHC services during the first 12 months of operation as an FQHC or RHC. After the first 12-month period, the projected per-visit rate shall be increased by the Medicare Economic Index then in effect. The projected allowable costs for the first 12 months shall be cost settled and the prospective payment reimbursement rate shall be adjusted based on actual and allowable cost per visit.
(D) The department may adopt any further and additional methods of setting reimbursement rates for newly qualified FQHCs or RHCs as are consistent with Section 1396a(bb)(4) of Title 42 of the United States Code.
(4) In order for an FQHC or RHC to establish the comparability of its caseload for purposes of subparagraph (A) or (B) of paragraph (1), the department shall require that the FQHC or RHC submit its most recent annual utilization report as submitted to the Office of Statewide Health Planning and Development, unless the FQHC or RHC was not required to file an annual utilization report. FQHCs or RHCs that have experienced changes in their services or caseload subsequent to the filing of the annual utilization report may submit to the department a completed report in the format applicable to the prior calendar year. FQHCs or RHCs that have not previously submitted an annual utilization report shall submit to the department a completed report in the format applicable to the prior calendar year. The FQHC or RHC shall not be required to submit the annual utilization report for the comparable FQHCs or RHCs to the department, but shall be required to identify the comparable FQHCs or RHCs.
(5) The rate for any newly qualified entity set forth under this subdivision shall be effective retroactively to the later of the date that the entity was first qualified by the applicable federal agency as an FQHC or RHC, the date a new facility at a new location was added to an existing FQHC or RHC, or the date on which an existing FQHC or RHC was relocated to a new site. The FQHC or RHC shall be permitted to continue billing for Medi-Cal covered benefits on a fee-for-service basis under its existing provider number until it is informed of its FQHC or RHC enrollment approval, and the department shall reconcile the difference between the fee-for-service payments and the FQHC’s or RHC’s prospective payment rate at that time.
(j) (1) Visits occurring at an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of an existing FQHC or RHC, in a mobile unit as defined by paragraph (2) of subdivision (b) of Section 1765.105 of the Health and Safety Code, or at the election of the FQHC or RHC and subject to paragraph (2), a location added to an existing primary care clinic license by the State Department of Public Health prior to January 1, 2017, shall be billed by and reimbursed at the same rate as the FQHC or RHC that either established the intermittent clinic site or mobile unit, or that held the clinic license to which the location was added prior to January 1, 2017.
(2) If an FQHC or RHC with at least one additional location on its primary care clinic license that was added by the State Department of Public Health prior to January 1, 2017, applies for an adjustment to its per-visit rate based on a change in the scope of services service provided by the FQHC or RHC as described in subdivision (e), all locations on the FQHC’s or RHC’s primary care clinic license shall be subject to a scope-of-service adjustment in accordance with either paragraph (2) or (3) of subdivision (i), as selected by the FQHC or RHC.
(3) This subdivision does not preclude or otherwise nor limit the right of the FQHC or RHC to request a scope-of-service adjustment to the rate.
(k) An FQHC or RHC may elect to have pharmacy or dental services reimbursed on a fee-for-service basis, utilizing the current fee schedules established for those services. These costs shall be adjusted out of the FQHC’s or RHC’s clinic base rate as scope-of-service changes. An FQHC or RHC that reverses its election under this subdivision shall revert to its prior rate, subject to an increase to account for all Medicare Economic Index increases occurring during the intervening time period, and subject to any increase or decrease associated with applicable scope-of-service adjustments as provided in subdivision (e).
(l) Reimbursement for Drug Medi-Cal services shall be provided pursuant to this subdivision.
(1) An FQHC or RHC may elect to have Drug Medi-Cal services reimbursed directly from a county or the department under contract with the FQHC or RHC pursuant to paragraph (4).
(2) (A) For an FQHC or RHC to receive reimbursement for Drug Medi-Cal services directly from the county or the department under contract with the FQHC or RHC pursuant to paragraph (4), costs associated with providing Drug Medi-Cal services shall not be included in the FQHC’s or RHC’s per-visit PPS rate. For purposes of this subdivision, the costs associated with providing Drug Medi-Cal services shall not be considered to be within the FQHC’s or RHC’s clinic base PPS rate if in delivering Drug Medi-Cal services the clinic uses different clinical staff at a different location.
(B) If the FQHC or RHC does not use different clinical staff at a different location to deliver Drug Medi-Cal services, the FQHC or RHC shall submit documentation, in a manner determined by the department, that the current per-visit PPS rate does not include any costs related to rendering Drug Medi-Cal services, including costs related to utilizing space in part of the FQHC’s or RHC’s building, that are or were previously calculated as part of the clinic’s base PPS rate.
(3) If the costs associated with providing Drug Medi-Cal services are within the FQHC’s or RHC’s clinic base PPS rate, as determined by the department, the Drug Medi-Cal services costs shall be adjusted out of the FQHC’s or RHC’s per-visit PPS rate as a change in scope of service.
(A) An FQHC or RHC shall submit to the department a scope-of-service change request to adjust the FQHC’s or RHC’s clinic base PPS rate after the first full fiscal year of rendering Drug Medi-Cal services outside of the PPS rate. Notwithstanding subdivision (e), the scope-of-service change request shall include a full fiscal year of activity that does not include Drug Medi-Cal services costs.
(B) An FQHC or RHC may submit requests for scope-of-service change under this subdivision only within 90 days following the beginning of the FQHC’s or RHC’s fiscal year. Any A scope-of-service change request under this subdivision approved by the department shall be retroactive to the first day that Drug Medi-Cal services were rendered and reimbursement for Drug Medi-Cal services was received outside of the PPS rate, but in no case shall the effective date be earlier than January 1, 2018.
(C) The FQHC or RHC may bill for Drug Medi-Cal services outside of the PPS rate when the FQHC or RHC obtains approval as a Drug Medi-Cal provider and enters into a contract with a county or the department to provide these services pursuant to paragraph (4).
(D) Within 90 days of receipt of the request for a scope-of-service change under this subdivision, the department shall issue the FQHC or RHC an interim rate equal to 90 percent of the FQHC’s or RHC’s projected allowable cost, as determined by the department. An audit to determine the final rate shall be performed in accordance with Section 14170.
(E) Rate changes based on a request for scope-of-service change under this subdivision shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(F) For purposes of recalculating the PPS rate, the FQHC or RHC shall provide upon request to the department verifiable documentation as to which employees spent time, and the actual time spent, providing federally qualified health center services or rural health center services and Drug Medi-Cal services.
(G) After the department approves the adjustment to the FQHC’s or RHC’s clinic base PPS rate and the FQHC or RHC is approved as a Drug Medi-Cal provider, an FQHC or RHC shall not bill the PPS rate for any Drug Medi-Cal services provided pursuant to a contract entered into with a county or the department pursuant to paragraph (4).
(H) An FQHC or RHC that reverses its election under this subdivision shall revert to its prior PPS rate, subject to an increase to account for all Medicare Economic Index increases occurring during the intervening time period, and subject to any increase or decrease associated with the applicable scope-of-service adjustments as provided for in subdivision (e).
(4) Reimbursement for Drug Medi-Cal services shall be determined according to subparagraph (A) or (B), depending on whether the services are provided in a county that participates in the Drug Medi-Cal organized delivery system (DMC-ODS).
(A) In a county that participates in the DMC-ODS, the FQHC or RHC shall receive reimbursement pursuant to a mutually agreed upon contract entered into between the county or county designee and the FQHC or RHC. If the county or county designee refuses to contract with the FQHC or RHC, the FQHC or RHC may follow the contract denial process set forth in the Special Terms and Conditions.
(B) In a county that does not participate in the DMC-ODS, the FQHC or RHC shall receive reimbursement pursuant to a mutually agreed upon contract entered into between the county and the FQHC or RHC. If the county refuses to contract with the FQHC or RHC, the FQHC or RHC may request to contract directly with the department and shall be reimbursed for those services at the Drug Medi-Cal fee-for-service rate.
(5) The department shall not reimburse an FQHC or RHC pursuant to subdivision (h) for the difference between its per-visit PPS rate and any payments for Drug Medi-Cal services made pursuant to this subdivision.
(6) For purposes of this subdivision, the following definitions apply:
(A) “Drug Medi-Cal organized delivery system” or “DMC-ODS” means the 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.
(B) “Special Terms and Conditions” has the same meaning as set forth in subdivision (o) of Section 14184.10.
(m) Reimbursement for specialty mental health services shall be provided pursuant to this subdivision.
(1) An FQHC or RHC and one or more mental health plans that contract with the department pursuant to Section 14712 may mutually elect to enter into a contract to have the FQHC or RHC provide specialty mental health services to Medi-Cal beneficiaries as part of the mental health plan’s network.
(2) (A) For an FQHC or RHC to receive reimbursement for specialty mental health services pursuant to a contract entered into with the mental health plan under paragraph (1), the costs associated with providing specialty mental health services shall not be included in the FQHC’s or RHC’s per-visit PPS rate. For purposes of this subdivision, the costs associated with providing specialty mental health services shall not be considered to be within the FQHC’s or RHC’s clinic base PPS rate if in delivering specialty mental health services the clinic uses different clinical staff at a different location.
(B) If the FQHC or RHC does not use different clinical staff at a different location to deliver specialty mental health services, the FQHC or RHC shall submit documentation, in a manner determined by the department, that the current per-visit PPS rate does not include any costs related to rendering specialty mental health services, including costs related to utilizing space in part of the FQHC’s or RHC’s building, that are or were previously calculated as part of the clinic’s base PPS rate.
(3) If the costs associated with providing specialty mental health services are within the FQHC’s or RHC’s clinic base PPS rate, as determined by the department, the specialty mental health services costs shall be adjusted out of the FQHC’s or RHC’s per-visit PPS rate as a change in scope of service.
(A) An FQHC or RHC shall submit to the department a scope-of-service change request to adjust the FQHC’s or RHC’s clinic base PPS rate after the first full fiscal year of rendering specialty mental health services outside of the PPS rate. Notwithstanding subdivision (e), the scope-of-service change request shall include a full fiscal year of activity that does not include specialty mental health costs.
(B) An FQHC or RHC may submit requests for a scope-of-service change under this subdivision only within 90 days following the beginning of the FQHC’s or RHC’s fiscal year. Any scope-of-service change request under this subdivision approved by the department is retroactive to the first day that specialty mental health services were rendered and reimbursement for specialty mental health services was received outside of the PPS rate, but the effective date shall not be earlier than January 1, 2018.
(C) The FQHC or RHC may bill for specialty mental health services outside of the PPS rate when the FQHC or RHC contracts with a mental health plan to provide these services pursuant to paragraph (1).
(D) Within 90 days of receipt of the request for a scope-of-service change under this subdivision, the department shall issue the FQHC or RHC an interim rate equal to 90 percent of the FQHC’s or RHC’s projected allowable cost, as determined by the department. An audit to determine the final rate shall be performed in accordance with Section 14170.
(E) Rate changes based on a request for scope-of-service change under this subdivision shall be evaluated in accordance with Medicare reasonable cost principles, as set forth in Part 413 (commencing with Section 413.1) of Title 42 of the Code of Federal Regulations, or its successor.
(F) For the purpose of recalculating the PPS rate, the FQHC or RHC shall provide upon request to the department verifiable documentation as to which employees spent time, and the actual time spent, providing federally qualified health center services or rural health center services and specialty mental health services.
(G) After the department approves the adjustment to the FQHC’s or RHC’s clinic base PPS rate, an FQHC or RHC shall not bill the PPS rate for any specialty mental health services that are provided pursuant to a contract entered into with a mental health plan pursuant to paragraph (1).
(H) An FQHC or RHC that reverses its election under this subdivision shall revert to its prior PPS rate, subject to an increase to account for all Medicare Economic Index increases occurring during the intervening time period, and subject to any increase or decrease associated with the applicable scope-of-service adjustments as provided for in subdivision (e).
(4) The department shall not reimburse an FQHC or RHC pursuant to subdivision (h) for the difference between its per-visit PPS rate and any payments made for specialty mental health services under this subdivision.
(n) FQHCs and RHCs may appeal a grievance or complaint concerning ratesetting, scope-of-service changes, and settlement of cost report audits, in the manner prescribed by Section 14171. The rights and remedies provided under this subdivision are cumulative to the rights and remedies available under all other provisions of law of this state.
(o) The department shall promptly seek all necessary federal approvals in order to implement this section, including any amendments to the state plan. To the extent that any element or requirement of this section is not approved, the department shall submit a request to the federal Centers for Medicare and Medicaid Services for any waivers that would be necessary to implement this section.
(p) The department shall implement this section only to the extent that federal financial participation is available.
(q) Notwithstanding any other law, the director may, without taking regulatory action pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, implement, interpret, or make specific subdivisions (l) and (m) by means of a provider bulletin or similar instruction. The department shall notify and consult with interested parties and appropriate stakeholders in implementing, interpreting, or making specific the provisions of subdivisions (l) and (m), including all of the following:
(1) Notifying provider representatives in writing of the proposed action or change. The notice shall occur, and the applicable draft provider bulletin or similar instruction, shall be made available at least 10 business days prior to the meeting described in paragraph (2).
(2) Scheduling at least one meeting with interested parties and appropriate stakeholders to discuss the proposed action or change.
(3) Allowing for written input regarding the proposed action or change, to which the department shall provide summary written responses in conjunction with the issuance of the applicable final written provider bulletin or similar instruction.
(4) Providing at least 60 days advance notice of the effective date of the proposed action or change.

SEC. 4.

 Section 14132.726 is added to the Welfare and Institutions Code, to read:

14132.726.
 If federally qualified health center (FQHC) services and rural health clinic (RHC) services, as described in Section 1396d(a)(2) of Title 42 of the United States Code and Section 14132.100, involve telehealth by synchronous real time or asynchronous store and forward, all of the following apply:
(a) Face-to-face contact between a health care provider and a patient is not required for the FQHC or RHC to establish the patient at any time, including during an initial telehealth visit by synchronous real time or asynchronous store and forward, as a patient of record of the FQHC or RHC or to render and bill for services by telehealth synchronous real time or asynchronous store and forward services pursuant to subdivisions (c) and (g) of Section 14132.100, if all of the following requirements are met:
(1) A licensed nonbillable Medi-Cal provider, who is employed by the billing FQHC or RHC, is physically present with the patient at the originating site, as defined in paragraph (4) of subdivision (a) of Section 2290.5 of the Business and Professions Code.
(2) The billing provider is also an employee of the FQHC or RHC.
(3) The patient is at an originating site, as defined in paragraph (4) of subdivision (a) of Section 2290.5 of the Business and Professions Code, that is a licensed FQHC or RHC or an intermittent clinic site, as defined in subdivision (h) of Section 1206 of the Health and Safety Code, of the FQHC or RHC, and is located within the FQHC’s or RHC’s federally designated service area.
(4) A billable provider in the Medi-Cal program, and who is employed by the FQHC or RHC, supervises a licensed provider or provides the health services for that patient via telehealth by synchronous real time or asynchronous store and forward.
(b) A patient relationship with the FQHC or RHC may be established at any time, including during an initial visit that includes telehealth by synchronous real time or asynchronous store and forward.
(c) (1) For purposes of this section and pursuant to paragraph (4) of subdivision (g) of Section 14132.100, an FQHC or RHC “visit” includes a visit using telehealth by synchronous real time or asynchronous store and forward pursuant to Section 14132.726.
(2) For purposes of this section, a “patient” is an individual enrolled in the Medi-Cal program who may or may not have an established patient of record relationship with the FQHC or RHC.
(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, and make specific this section by means of all-county letters, provider bulletins, and similar instructions. By July 1, 2022, the department shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Beginning six months after the effective date of this section, and notwithstanding Section 10231.5 of the Government Code, the department shall provide a status report to the Legislature on a semiannual basis until regulations have been adopted.

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REVISIONS:
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