Public health funding: health facilities and services.

(1) Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires the department to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Existing law requires that the fee be based on the entire net revenue of all skilled nursing facilities subject to the fee. Existing law prohibits the fee from being assessed after July 31, 2020, and repeals these provisions on January 1, 2021. Existing law authorizes the Director of Health Care Services to promulgate regulations on these provisions, and to implement these provisions by provider bulletin or similar instruction so long as that guidance remains in effect only until July 31, 2020, and that regulations are adopted by that date. Existing law requires the department to request approval from the federal Centers for Medicare and Medicaid Services to implement these provisions, and authorizes the director to alter the methodology, to the extent necessary to meet the requirements of federal law or regulations or to obtain federal approval. This bill would establish various enforcement mechanisms for the department to collect delinquent quality assurance fees, such as requiring the department to assess interest on a skilled nursing facility that fails to pay all or part of the quality assurance fee within 60 days of the date that payment is due, beginning on the 61st calendar day from the date the payment is due, until the unpaid amount due and any interest is paid in full, and authorizing the department to deduct unpaid assessments, including any interest and penalties owed, attributable to a debtor facility from any Medi-Cal payments made to a related facility or entity by common ownership or control to the debtor facility. In the event of a merger, acquisition, or change of ownership involving a skilled nursing facility, this bill would authorize the department to delay approval of a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility until the full amount of the quality assurance fees, penalties, and interest owed by the successor or previous facility owner is recovered in full, to take specified action as a condition of approving a new Medi-Cal provider agreement or a transfer of an existing Medi-Cal provider agreement to a successor skilled nursing facility, and to waive a portion or all of the interest or penalties, or interest or penalties assessed if the department determines that the facility has demonstrated that imposing the full amount of fees has a high likelihood of creating an undue financial hardship for the facility or creates a significant financial difficulty in providing services to Medi-Cal beneficiaries. The bill would extend the department's imposition of a uniform quality assurance fee to December 31, 2022, and would repeal those provisions on January 1, 2024. (2) Existing law, the Medi-Cal Long-Term Care Reimbursement Act, requires the department to implement a facility-specific reimbursement ratesetting system for certain skilled nursing facilities. Reimbursement rates for freestanding skilled nursing facilities are funded by a combination of federal funds and moneys collected pursuant to the skilled nursing uniform quality assurance fee. Existing law also establishes the Skilled Nursing Facility Quality and Accountability Special Fund in the State Treasury, which is a continuously appropriated fund that contains moneys from the assessment of specified administrative penalties and set asides of General Fund moneys, for the purposes of making quality and accountability payments, including supplemental payments. Under the act, the department is required to develop the Skilled Nursing Facility Quality and Accountability Supplemental Payment System (system) , which is utilized to provide supplemental payments to skilled nursing facilities that improve the quality and accountability of care rendered to residents in skilled nursing facilities, and to penalize those facilities that do not meet measurable standards. Under existing law, the rate methodology becomes inoperative after July 31, 2020, and these provisions will be repealed on January 1, 2021. Existing law authorizes the director to promulgate regulations on these provisions, and to implement these provisions by provider bulletin or similar instruction so long as that guidance remains in effect only until July 31, 2020, and that regulations are adopted by that date. This bill would make various changes to the act, including providing that special program services for the mentally disordered that are entitled to receive supplemental payment are exempt from the system. The bill would extend the department's use of the Skilled Nursing Facility Quality and Accountability Special Fund to December 31, 2022. The bill would modify parameters of the supplemental payment, and would cease the availability of those payments on January 1, 2023. The bill would require the department to convene a stakeholder process by September 1, 2021 to develop a successor supplemental payment or similar quality-based payment methodology to replace the supplemental payments, starting in calendar year 2023. The bill would make various changes to the Medi-Cal rate reimbursement methodology, including that the reimbursement rates established for the rate period of August 1, 2020, to December 31, 2020, inclusive, be no less than the amounts that would otherwise have been established under the reimbursement methodology for the 2019–20 rate year, and that the weighted average Medi-Cal reimbursement rate increase not exceed the applicable federal upper payment limit. The bill would also exempt a unit that provides freestanding pediatric subacute care services in a skilled nursing facility from the quality assurance fee requirements for that rate period and every subsequent calendar year thereafter. The bill would establish annual aggregate rate increases for the 2020 to 2024, inclusive, calendar years, as prescribed, and set forth the annual rate methodologies. The bill would authorize the department to modify any methodology or other provision regarding the reimbursement methodology, to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or is not otherwise jeopardized. Before implementing a modification, the bill would require the department to consult with affected providers and stakeholders to the extent practicable, and to notify affected providers, the Joint Legislative Budget Committee, and the relevant policy and fiscal committees of the Legislature within 10 business days of that modification. The bill would require the department to audit the costs and revenues of skilled nursing facilities that are associated with the COVID-19 Public Health Emergency, as determined by the department, to determine whether a skilled nursing facility has adequately used increased Medicaid payments associated with the COVID-19 Public Health Emergency, as specified, for only allowable costs. The bill would implement the auditing requirement only to the extent any necessary federal approvals are obtained, and federal financial participation is available and is not otherwise jeopardized. The bill would extend the operative date of the act to December 31, 2022, and would repeal those provisions on January 1, 2024. By extending the period of time during which moneys are deposited in the Skilled Nursing Facility Quality and Accountability Special Fund, the bill would make an appropriation. (3) Existing law, the Mental Health Services Act (MHSA) , an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, establishes the Mental Health Services Fund (MHSF) , a continuously appropriated fund, to fund various county mental health programs, including children's mental health care, adult and older adult mental health care, and prevention and early intervention programs. Existing law requires funds, other than those placed in a prudent reserve, to revert to the state if the funds have not been spent or encumbered within 3 years. This bill would authorize the State Department of Health Care Services to allow counties to determine the percentage of funds to allocate across specified mental health programs for the 2020–21 fiscal year by means of all-county letters or other similar instructions without taking any further regulatory action. The bill would amend the MHSA by making funds that are subject to reversion as of July 1, 2019, and July 1, 2020, instead subject to reversion as of July 1, 2021. The MHSA established the Mental Health Services Oversight and Accountability Commission and requires the counties to prepare and submit a 3-year program and expenditure plan, and annual updates, as specified, to the commission and the department. This bill would authorize a county that is unable to complete and submit a 3-year plan or annual update for the 2020–21 fiscal year due to the COVID-19 Public Health Emergency to extend the effective timeframe of its currently approved 3-year plan or annual update to include the 2020–21 fiscal year. The bill would require a county to submit a 3-year program and expenditure plan or annual update to the commission and the department by July 1, 2021. Existing law authorizes the MHSA to be amended by a 2/3 vote of each house of the Legislature if the amendments are consistent with, and further the intent of, the MHSA. Existing law authorizes the Legislature to add provisions to the act to clarify procedures and terms of the act by majority vote. This bill would state the finding of the Legislature that the changes made are consistent with, and further the purposes of, the MHSA. (4) Existing law requires a county to establish and maintain a prudent reserve as part of the 3-year plan to ensure the county program will continue to be able to serve children, adults, and seniors, as specified, and requires the county to allocate funds from the reserve for services in years when the allocation of funds for services are not adequate to serve the same number of individuals as the county had served in the previous fiscal year. This bill would specify that a county may, during the 2020–21 fiscal year, use funds from its prudent reserve for specified services to persons who are served by the MHSA, including housing assistance. (5) This bill would state that its provisions are severable. (6) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.