2005 California Welfare and Institutions Code Sections 14464.5 Care Plans

14464.5.  (a) For purposes of this article, the following
definitions apply:
   (1) "Capitation payment" means the monthly amount paid by the
state to a designated Medi-Cal managed care plan in exchange for
contracted health care services procured by means of the Medi-Cal
managed care contracts described in paragraph (3).
   (2) "Capitation rate" means the per member per month rate used to
calculate the capitation payments.
   (3) "Medi-Cal managed care plan" means any Medi-Cal managed care
plan contracting with the department to provide services to enrolled
Medi-Cal beneficiaries pursuant to Article 2.7 (commencing with
Section 14087.3), Article 2.9 (commencing with Section 14088),
Article 2.91 (commencing with Section 14089), and Section 14087.51 of
Chapter 7, or pursuant to this chapter, and that is also an
organization that meets the criteria in Section 1396b(w)(7)(A)(viii)
of Title 42 of the United States Code.
   (4) "Total operating revenue" means non-Medicare amounts received
by a managed care plan for the coverage or providing of all health
care services, including amounts received in exchange for health care
procured by means of a Medi-Cal managed care contract as described
in paragraph (3).  Total operating revenue does not include amounts
received by a managed care plan pursuant to a subcontract with a
Medi-Cal managed care plan to provide health care services to
Medi-Cal beneficiaries.
   (b) The department shall impose, on an annual basis, a quality
improvement fee no earlier than January 1, 2005.  The quality
improvement fee shall be paid to the state monthly and shall be 6
percent of each Medi-Cal managed care plan's total operating revenue.
  The quality improvement fee shall be subject to all of the
following provisions:
   (1) The quality improvement fee shall be paid monthly to the state
and is due within 15 calendar days following the close of each month
and shall be calculated on the prior month's total operating revenue
as defined in paragraph (4) of subdivision (a).
   (2) The quality improvement fee shall be deposited in the General
Fund.
   (3) If the Medi-Cal managed care plan does not timely pay the
quality improvement fee, or any part thereof, the department may
offset the amount of the fee that is unpaid against any amounts due
from the state to the Medi-Cal managed care plan.  Notwithstanding
any such offset, the methodology for determining the fee as set forth
in this subdivision shall be followed.
   (4) The department shall make retrospective adjustments as
necessary to the amounts calculated pursuant to this subdivision in
order to assure that the Medi-Cal managed care plan's aggregate
quality improvement fee for any particular state fiscal year does not
exceed 6 percent of the total operating revenue for the Medi-Cal
managed care plan for that year.
   (5) If, on account of delay in the adoption of the annual Budget
Act, or for any other reason, a Medi-Cal managed care plan is not
paid by the department for a period in excess of 30 days, the payment
date for the fee specified in paragraph (1) shall be extended until
45 days following the date that regular payments are resumed to the
plans.
   (6) On or before August 31 of each year, each Medi-Cal managed
care plan subject to the quality improvement fee shall report to the
department, in a prescribed form, the plan's total operating revenue
as defined in paragraph (4) of subdivision (a) for the preceding
state fiscal year.
   (7) Any fee imposed pursuant to this section shall not be
considered to be an administrative cost for purposes of Section 1378
of the Health and Safety Code, Section 14087.101, 14087.103, or
14087.105, or any regulation adopted pursuant to those sections.
   (c) (1) The department shall implement this section in a manner
that complies with federal requirements.  If the department is unable
to comply with the federal requirements for federal matching funds
under this section, the quality improvement fee shall  not be
assessed or collected.
   (2) The director may alter the methodology specified in this
section for calculating the quality improvement fee to the extent
necessary to meet the requirement of federal law or regulations.
   (3) If, after implementation of this section, federal disapproval
of the quality improvement fee program as described in this section
occurs, any fees paid by the plans to the department in any period
for which such disapproval is effective shall be refunded to the
plans.
   (d)  In addition to the Medi-Cal capitation rates that a Medi-Cal
managed care plan would otherwise receive for providing services to
Medi-cal beneficiaries, the capitation rates shall be increased in an
amount determined by the department, subject to the following
requirements:
   (1) The additional Medi-Cal reimbursement provided by this section
shall be distributed under a capitation payment methodology or on
any other federally permissible basis.
   (2) The additional Medi-Cal reimbursement provided by this section
shall not supplant the payments otherwise due to any Medi-Cal
managed care plan in the absence of such an additional reimbursement.
   (3) Additional reimbursement provided by this section to any
particular Medi-Cal managed care plan shall not cause the total
reimbursement paid to that plan to exceed any applicable limit on
payments as established pursuant to federal law and regulations.
   (e) The director, or his or her designee, shall administer this
section.
   (f) The director may adopt regulations as are necessary to
implement this section.  These regulations shall be adopted as
emergency regulations in accordance with the rulemaking provisions of
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code).  For purposes of this section, the adoption of regulations
shall be deemed an emergency and necessary for the immediate
preservation of the public peace, health, and safety or general
welfare.  The regulations shall include, but not be limited to, any
regulations necessary for either of the following purposes:
   (1) The administration of this section, including the proper
imposition and collection of the quality improvement fees.
   (2) The development of any forms necessary to calculate, notify,
collect, and distribute the quality improvement fees.
   (g) As an alternative to subdivision (f), and notwithstanding
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code, the director may implement this
section by means of a provider bulletin, contract amendment, policy
letter, or other similar instructions, without taking regulatory
action.
   (h) To the extent permitted by federal law, any limitation on
rates to the Medi-Cal managed care plan based on Medi-Cal
fee-for-service costs shall be increased to include any capitation
rate increase related to the quality improvement fee in subdivision
(b).
   (i) This section shall become inoperative on January 1, 2009, and,
as of July 1, 2009, is repealed, unless a later enacted statute,
that becomes effective on or before July 1, 2009, deletes or extends
the dates on which it becomes inoperative and is repealed.