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AB 1863
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1863 (Wood)
As Amended August 17, 2016
Majority vote
ASSEMBLY:
78-1
(June 1, 2016)
SENATE:
39-0
(August 22, 2016)
Original Committee Reference: HEALTH
SUMMARY: Adds marriage and family therapists (MFTs) to the list of healthcare professionals
that qualify for a face-to-face encounter with a patient at Federally Qualified Health Centers
(FQHCs) or Rural Health Clinics (RHCs) for purposes of a per-visit Medi-Cal payment under the
prospective payment system (PPS). Makes conforming changes, including requiring an FQHC
or an RHC that includes the costs of the services of an MFT that chooses to bill these services as
a separate visit, to apply for an adjustment to its per-visit rate; that multiple encounters with an
MFT on the same day constitutes a single visit; adjustment of rates; and, change in scope of
service requirements.
The Senate amendments make this bill operative only if SB 1335 (Mitchell) of the current
legislative session and this bill are both chaptered and become effective on or before January 1,
2017, and this bill is chaptered last.
FISCAL EFFECT: According to the Senate Appropriations Committee:
1) One-time costs, likely in the low millions to recalculate the PPS rate for clinics that are
providing marriage and family therapist services or wish to add those services (General Fund
and federal funds). The bill requires clinics that are currently including marriage and family
therapist services in the costs used to calculate their PPS rate to seek a recalculation of the
rate to allow the clinic to bill for face-to-face visits. The process for recalculating a PPS rate
requires a detailed review of utilization and expenditures by clinics. For example, assuming
that the cost of performing such a review is about $10,000 and that 500 clinics seek a
recalculation, the administrative costs to the Department of Health Care Services would be
about $5 million.
2) No significant increase in costs is expected for MFT services currently being provided in
eligible clinics. Under the current system for calculating the PPS rate paid by Medi-Cal to
federally qualified health centers and rural health clinics, the total amount of eligible services
(including mental health services) provided to Medi-Cal beneficiaries is divided by the
number of eligible face-to-face visits (e.g. a visit with a physician or clinical psychologist).
Because the bill requires a recalculation of the PPS to account for the fact that MFTs would
be eligible for face-to-face billing before a clinic can bill for such an encounter, the Medi-Cal
program is not expected to pay more for services currently being provided. (In other words,
a clinic employing MFTs would be able to bill for more face-to-face encounters, but the PPS
rate would be lower to account for those visits.)
3) Unknown potential increase in Medi-Cal paid visits to eligible clinics. Under current law, a
Medi-Cal beneficiary who visits a federally qualified health center or rural health clinic must
be seen by certain types of providers (not including MFTs) in order for the clinic to bill
Medi-Cal for the visit. In theory, the bill could allow clinics to bill Medi-Cal for more
AB 1863
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overall visits, because it may be easier to hire MFTs than other practitioners, such as
physicians or psychologists. However, under current practice, clinics can already qualify a
patient visit by having the patient see seven categories of health care providers. The actual
impact on overall visitations to qualifying clinics may be small, given that clinics can already
use a variety of practitioners to qualify the patient visit for payment from Medi-Cal.
COMMENTS: According to the author, psychologists and licensed clinical social workers are
currently employed by RHCs and FQHCs and these clinics receive reimbursement for these
providers. While clinics may employ an MFT, there is not a reimbursement mechanism for these
professionals, which creates a disincentive to hire MFTs. MFTs are billable and recognized
providers under the Medi-Cal program but not in community settings. Within the primary care
setting, up to 26% of patients have some mental health disorder. This measure brings parity
throughout the Medi-Cal program and allows for the utilization of all qualified mental health
providers, regardless of how or where the treatment is provided.
FQHCs and RHCs serve a significant portion of the uninsured and underinsured in California.
They are open-door providers that treat patients on a sliding scale fee structure and make their
services available regardless of a patient's ability to pay. There are approximately 600 FQHCs
and 350 RHCs in California. All FQHCs, and a majority of the RHCs, are either non-profit
community clinics or government entities. Because clinics are safety net providers, their
continued survival depends heavily on the stability and adequacy of revenues from the Medi-Cal
program. FQHCs and RHCs are paid by Medi-Cal on a "per visit" basis in an amount equal to
the clinic's cost of delivering services. Essentially, DHCS calculates the annual cost of care
provided by each clinic and divides the total by the number of visits to determine a per visit rate.
Reimbursement to FQHCs and RHCs is governed by state and federal law. FQHCs and RHCs
are reimbursed by Medi-Cal on a per-visit rate which is known as the PPS. For Medi-Cal
managed care plan patients, DHCS reimburses FQHCs and RHCs for the difference between its
per-visit PPS rate and the payment made by the plan. This payment is known as a "wrap around"
payment. The Medi-Cal managed care wrap-around rate was established to reimburse providers
for the difference between their PPS rate and their Medi-Cal managed care reimbursement rate.
DHCS' policy on same day visits, as stated in its in its State Plan Amendment, is that encounters
with more than one health professional and/or multiple encounters with the same health
professional, which take place on the same day and at a single FQHC or RHC location, constitute
a single visit, except that more than one visit may be counted on the same day: 1) when the
clinic patient, after the first visit, suffers illness or injury requiring another diagnosis or
treatment; or, 2) when the clinic patient has a face-to-face encounter with a dentist or dental
hygienist and then also has a face-to-face encounter with another health professional or
comprehensive perinatal services practitioner on the same date. Mental health visits are treated
for Medi-Cal billing purposes as a same day visit, and separate billing on the same day for a
medical visits and a mental health visit is not allowed.
Analysis Prepared by: Rosielyn Pulmano / HEALTH / (916) 319-2097
FN: 00045340003280