kind: section

code: WIC

text:
(a) For purposes of this section, “Attachment 4.19-A” means the Medi-Cal payment adjustment system for acute inpatient hospital services set forth in Attachment 4.19-A of the Medi-Cal State Plan which became effective on or about July 1, 1990.

(b) (1) It is the intent of the Legislature that the annual appropriation for, and distribution of, payments pursuant to Attachment 4.19-A shall be reduced as a result of the payment adjustment program set forth in Section 14105.98, but only when federal approval, as described in paragraph (2) of subdivision (d) of Section 14105.98, is gained for that payment adjustment program.

(2) When the payment adjustment program set forth in Section 14105.98 gains federal approval, Attachment 4.19-A shall become inoperative and any appropriated amount for Attachment 4.19-A that is unexpended shall revert to the Health Care Deposit Fund for use in support of the Medi-Cal program.

history: (History: Amended by Stats. 1991, Ch. 1046, Sec. 4. Effective October 14, 1991.)

division: 9. PUBLIC SOCIAL SERVICES

chapter: 7. Basic Health Care

article: 3. Administration

path: 9. PUBLIC SOCIAL SERVICES > 7. Basic Health Care > 3. Administration


text:
(a) The department may negotiate or renegotiate settlements with any acute care hospital in San Diego County that has a distinct part pediatric convalescent facility and that has violated any Medi-Cal reimbursement policy or procedure governing the operation of acute care hospitals.

(b) In any settlement negotiated or renegotiated pursuant to this section, the department may waive all or part of any overpayment made under this chapter to any acute care hospital described in subdivision (a) that would otherwise be reimbursable to the department by that acute care hospital.

history: (History: Added by Stats. 2002, Ch. 486, Sec. 1. Effective September 12, 2002.)

article: 3. Administration


text:
(a) For purposes of this section, the following definitions shall apply:

(1) “The Family Planning, Access, Care, and Treatment (Family PACT) waiver” or “Family PACT waiver” means the program described in subdivision (aa) of Section 14132, as approved by a federal demonstration waiver.

(2) “Comprehensive clinical family planning services” means those services described in paragraph (8) of subdivision (aa) of Section 14132.

(3) “Office visits” means those procedures billed under Common Procedure Terminology codes 99201, 99202, 99203, 99204, 99211, 99212, 99213, and 99214.

(b) Reimbursement rates for office visits billed as comprehensive clinical family planning services by Family PACT waiver providers and for office visits billed as family planning services by Medi-Cal providers shall receive a rate augmentation equal to the weighted average of at least 80 percent of the amount that the federal Medicare program reimburses for these same or similar office visits. The rate augmentation shall be based upon Medicare rates in effect on December 31, 2007.

(c) The augmentation of reimbursement rates described in subdivision (b) shall be made for office visits rendered on or after January 1, 2008.

(d) (1) The director may adopt regulations as necessary to implement this section. These regulations may 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 the regulations shall be deemed an emergency and necessary for the immediate preservation of the public peace, health and safety, or the general welfare.

(2) As an alternative to paragraph (1), and notwithstanding 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), the director may administer this section, in whole or in part, by means of a provider bulletin, or other similar instructions, without taking regulatory action.

history: (History: Added by Stats. 2007, Ch. 636, Sec. 1. Effective January 1, 2008.)

article: 3. Administration


text:
(a) Notwithstanding any other provision of law, in order to implement changes in the level of funding for health care services, the director shall reduce provider payments, as specified in this section.

(b) (1) Except as otherwise provided in this section, payments shall be reduced by 1 percent for Medi-Cal fee-for-service benefits for dates of service on and after March 1, 2009.

(2) Except as provided in subdivision (d), for dates of service on and after March 1, 2009, payments to the following classes of providers shall be reduced by 5 percent for Medi-Cal fee-for-service benefits:

(A) Intermediate care facilities, excluding those facilities identified in paragraph (5) of subdivision (d). For purposes of this section, “intermediate care facility” has the same meaning as defined in Section 51118 of Title 22 of the California Code of Regulations.

(B) Skilled nursing facilities that are distinct parts of general acute care hospitals. For purposes of this section, “distinct part” has the same meaning as defined in Section 72041 of Title 22 of the California Code of Regulations.

(C) Rural swing-bed facilities.

(D) Subacute care units that are, or are parts of, distinct parts of general acute care hospitals. For purposes of this subparagraph, “subacute care unit” has the same meaning as defined in Section 51215.5 of Title 22 of the California Code of Regulations.

(E) Pediatric subacute care units that are, or are parts of, distinct parts of general acute care hospitals. For purposes of this subparagraph, “pediatric subacute care unit” has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.

(F) Adult day health care centers.

(3) Except as provided in subdivision (d), for dates of service on and after March 1, 2009, Medi-Cal fee-for-service payments to pharmacies shall be reduced by 5 percent.

(4) Except as provided in subdivision (d), payments shall be reduced by 1 percent for non-Medi-Cal programs described in Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, and Section 14105.18, for dates of service on and after March 1, 2009.

(5) For managed health care plans that contract with the department pursuant to this chapter, Chapter 8 (commencing with Section 14200), and Chapter 8.75 (commencing with Section 14591), payments shall be reduced by the actuarial equivalent amount of the payment reductions specified in this subdivision pursuant to contract amendments or change orders effective on July 1, 2008, or thereafter.

(c) Notwithstanding any other provision of this section, payments to hospitals that are not under contract with the State Department of Health Care Services pursuant to Article 2.6 (commencing with Section 14081) for inpatient hospital services provided to Medi-Cal beneficiaries and that are subject to Section 14166.245 shall be governed by that section.

(d) To the extent applicable, the services, facilities, and payments listed in this subdivision shall be exempt from the payment reductions specified in subdivision (b):

(1) Acute hospital inpatient services that are paid under contracts pursuant to Article 2.6 (commencing with Section 14081).

(2) Federally qualified health center services, including those facilities deemed to have federally qualified health center status pursuant to a waiver pursuant to subsection (a) of Section 1115 of the federal Social Security Act (42 U.S.C. Sec. 1315(a)).

(3) Rural health clinic services.

(4) Skilled nursing facilities licensed pursuant to subdivision (c) of Section 1250 of the Health and Safety Code other than those specified in paragraph (2) of subdivision (b).

(5) Intermediate care facilities for the developmentally disabled licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of the Health and Safety Code, or facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14495.10.

(6) Payments to facilities owned or operated by the State Department of State Hospitals or the State Department of Developmental Services.

(7) Hospice services.

(8) Contract services, as designated by the director pursuant to subdivision (g).

(9) Payments to providers to the extent that the payments are funded by means of a certified public expenditure or an intergovernmental transfer pursuant to Section 433.51 of Title 42 of the Code of Federal Regulations.

(10) Services pursuant to local assistance contracts and interagency agreements to the extent the funding is not included in the funds appropriated to the department in the annual Budget Act.

(11) Payments to Medi-Cal managed care plans pursuant to Section 4474.5 for services to consumers transitioning from Agnews Developmental Center into the Counties of Alameda, San Mateo, and Santa Clara pursuant to the Plan for the Closure of Agnews Developmental Center.

(12) Breast and cervical cancer treatment provided pursuant to Section 14007.71 and as described in paragraph (3) of subdivision (a) of Section 14105.18 or Article 1.5 (commencing with Section 104160) of Chapter 2 of Part 1 of Division 103 of the Health and Safety Code.

(13) The Family Planning, Access, Care, and Treatment (Family PACT) Program pursuant to subdivision (aa) of Section 14132.

(14) Small and rural hospitals, as defined in Section 124840 of the Health and Safety Code.

(e) Subject to the exemptions listed in subdivision (d), the payment reductions required by paragraph (1) of subdivision (b) shall apply to the benefits rendered by any provider who may be authorized to bill for provision of the benefit, including, but not limited to, physicians, podiatrists, nurse practitioners, certified nurse midwives, nurse anesthetists, and organized outpatient clinics.

(f) (1) Notwithstanding any other provision of law, Medi-Cal reimbursement rates applicable to the classes of providers identified in paragraph (2) of subdivision (b), for services rendered during the 2009–10 rate year and each rate year thereafter, shall not exceed the reimbursement rates that were applicable to those classes of providers in the 2008–09 rate year.

(2) In addition to the classes of providers described in paragraph (1), Medi-Cal reimbursement rates applicable to the following classes of facilities for services rendered during the 2009–10 rate year, and each rate year thereafter, shall not exceed the reimbursement rates that were applicable to those facilities and services in the 2008–09 rate year:

(A) Facilities identified in paragraph (5) of subdivision (d).

(B) Freestanding pediatric subacute care units, as defined in Section 51215.8 of Title 22 of the California Code of Regulations.

(3) Paragraphs (1) and (2) shall not apply to providers that are paid pursuant to Article 3.8 (commencing with Section 14126), or to services, facilities, and payments specified in subdivision (d), with the exception of facilities described in paragraph (5) of subdivision (d).

(4) The limitation set forth in this subdivision shall be applied only after the reductions in paragraph (2) of subdivision (b) have been made.

(g) 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 and administer this section by means of provider bulletins, or similar instructions, without taking regulatory action.

(h) The reductions and limitations described in this section shall apply only to payments for benefits when the General Fund share of the payment is paid with funds directly appropriated to the department in the annual Budget Act, and shall not apply to payments for benefits paid with funds appropriated to other departments or agencies.

(i) The department shall promptly seek any necessary federal approvals for the implementation of this section. To the extent that federal financial participation is not available with respect to any payment that is reduced or limited pursuant to this section, the director may elect not to implement that reduction or limitation.

history: (History: Amended by Stats. 2012, Ch. 440, Sec. 78. (AB 1488) Effective September 22, 2012.)

article: 3. Administration


text:
(a) The Legislature finds and declares all of the following:

(1) Costs within the Medi-Cal program continue to grow due to the rising cost of providing health care throughout the state and also due to increases in enrollment, which are more pronounced during difficult economic times.

(2) In order to minimize the need for drastically cutting enrollment standards or benefits during times of economic crisis, it is crucial to find areas within the Medi-Cal program that have reimbursement levels higher than required under the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and may be reduced in accordance with federal law.

(3) The Medi-Cal program delivers its services and benefits to Medi-Cal beneficiaries through a wide variety of health care providers, some of which deliver care via managed care or other contract models while others do so through fee-for-service arrangements.

(4) The setting of rates within the Medi-Cal program is complex and subject to close supervision by the United States Department of Health and Human Services.

(5) As the single state agency for the Medicaid program in California, the department has unique expertise that can inform decisions that set or adjust reimbursement methodologies and levels consistent with the requirements of federal law.

(b) Therefore, it is the intent of the Legislature for the department to analyze and identify where reimbursement levels can be reduced consistent with the standard provided in Section 1902(a)(30)(A) of the federal Social Security Act and consistent with federal and state law and policies, including exemptions contained in the act that added this section, provided that the reductions in reimbursement shall not exceed 10 percent on an aggregate basis for all providers, services, and products.

(c) Notwithstanding any other law, the director shall adjust provider payments, as specified in this section.

(d) (1) Except as otherwise provided in this section, payments shall be reduced by 10 percent for Medi-Cal fee-for-service benefits for dates of service on and after June 1, 2011.

(2) For managed health care plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200), except contracts with Senior Care Action Network and AIDS Healthcare Foundation, payments shall be reduced by the actuarial equivalent amount of the payment reductions specified in this section pursuant to contract amendments or change orders effective on July 1, 2011, or thereafter.

(3) Payments shall be reduced by 10 percent for non-Medi-Cal programs described in Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, and Section 14105.18, for dates of service on and after June 1, 2011. This paragraph shall not apply to inpatient hospital services provided in a hospital that is paid under contract pursuant to Article 2.6 (commencing with Section 14081).

(4) (A) Notwithstanding any other law, the director may adjust the payments specified in paragraphs (1) and (3) with respect to one or more categories of Medi-Cal providers, or for one or more products or services rendered, or any combination thereof, if the resulting reductions to any category of Medi-Cal providers, in the aggregate, total no more than 10 percent.

(B) The adjustments authorized in subparagraph (A) shall be implemented only if the director determines that, for each affected product, service, or provider category, the payments resulting from the adjustment comply with subdivision (m).

(e) Notwithstanding this section, payments to hospitals that are not under contract with the department pursuant to Article 2.6 (commencing with Section 14081) for inpatient hospital services provided to Medi-Cal beneficiaries and that are subject to former Section 14166.245 shall be governed by that section.

(f) Notwithstanding this section, both of the following apply:

(1) Payments to providers that are paid pursuant to Article 3.8 (commencing with Section 14126) shall be governed by that article.

(2) (A) Subject to subparagraph (B), for dates of service on and after June 1, 2011, Medi-Cal reimbursement rates for intermediate care facilities for the developmentally disabled licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of the Health and Safety Code, and facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14132.20, as determined by the applicable methodology for setting reimbursement rates for these facilities, shall not exceed the reimbursement rates that were applicable to providers in the 2008–09 rate year.

(B) (i) If Section 14105.07 is added to the Welfare and Institutions Code during the 2011–12 Regular Session of the Legislature, subparagraph (A) shall become inoperative.

(ii) If Section 14105.07 is added to the Welfare and Institutions Code during the 2011–12 Regular Session of the Legislature, then for dates of service on and after June 1, 2011, payments to intermediate care facilities for the developmentally disabled licensed pursuant to subdivision (e), (g), or (h) of Section 1250 of the Health and Safety Code, and facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14132.20, shall be governed by the applicable methodology for setting reimbursement rates for these facilities and by Section 14105.07.

(g) The department may enter into contracts with a vendor for the purposes of implementing this section on a bid or nonbid basis. In order to achieve maximum cost savings, the Legislature declares that an expedited process for contracts under this subdivision is necessary. Therefore, contracts entered into to implement this section and all contract amendments and change orders shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 Division 2 of the Public Contract Code.

(h) To the extent applicable, all of the following services, facilities, and payments shall be exempt from the payment reductions specified in subdivision (d):

(1) Acute hospital inpatient services that are paid under contracts pursuant to Article 2.6 (commencing with Section 14081).

(2) Federally qualified health center services, including those facilities deemed to have federally qualified health center status pursuant to a waiver pursuant to subsection (a) of Section 1115 of the federal Social Security Act (42 U.S.C. Sec. 1315(a)).

(3) Rural health clinic services.

(4) Payments to facilities owned or operated by the State Department of State Hospitals or the State Department of Developmental Services.

(5) Hospice services.

(6) Contract services, as designated by the director pursuant to subdivision (k).

(7) Payments to providers to the extent that the payments are funded by means of a certified public expenditure or an intergovernmental transfer pursuant to Section 433.51 of Title 42 of the Code of Federal Regulations. This paragraph shall apply to payments described in paragraph (3) of subdivision (d) only to the extent that they are also exempt from reduction pursuant to subdivision (l).

(8) Services pursuant to local assistance contracts and interagency agreements to the extent the funding is not included in the funds appropriated to the department in the annual Budget Act.

(9) Breast and cervical cancer treatment provided pursuant to Section 14007.71 and as described in paragraph (3) of subdivision (a) of Section 14105.18 or Article 1.5 (commencing with Section 104160) of Chapter 2 of Part 1 of Division 103 of the Health and Safety Code.

(10) The Family Planning, Access, Care, and Treatment (Family PACT) Program pursuant to subdivision (aa) of Section 14132.

(11) (A) Effective for dates of service on or after July 1, 2015, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later, dental services and applicable ancillary services.

(B) For dental managed care plans that contract with the department pursuant to this chapter or Chapter 8 (commencing with Section 14200), payments pursuant to contract amendments or change orders effective on or after July 1, 2015, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later.

(12) For dates of service on and after January 1, 2022, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later, providers of complex rehabilitation technology and complex rehabilitation technology services, as described in Section 14132.85.

(13) For dates of service on and after July 1, 2022, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later, all of the following services and providers:

(A) Nurses, including certified nurse-midwives, nurse anesthetists, certified pediatric nurse practitioners, certified family nurse practitioners, and group certified pediatric nurse practitioners.

(B) Alternative birth centers as described in Section 14148.8.

(C) Audiologists and hearing aid dispensers as described in Section 14105.49 of this code and Section 51319 of Title 22 of the California Code of Regulations.

(D) Respiratory care providers as described in Section 51316 of Title 22 of the California Code of Regulations.

(E) Durable medical equipment, as described in Section 51160 of Title 22 of the California Code of Regulations.

(F) Chronic dialysis clinics.

(G) Emergency medical air transportation services as described in Section 76000.10 of the Government Code.

(H) Nonemergency medical transportation services as described in Section 51323 of Title 22 of the California Code of Regulations.

(I) Doula services as described in Section 14132.24.

(J) Community health worker services as described in the approved Medi-Cal State Plan.

(K) Durable medical equipment and related supplies or accessories, as described in Section 14105.48 and Section 51160 of Title 22 of the California Code of Regulations, that is a continuous glucose monitoring system or continuous glucose monitoring system supplies and accessories, as determined by the department.

(L) Health care services delivered via remote patient monitoring, authorized pursuant to subparagraph (B) of paragraph (1) of subdivision (f) of Section 14124.12.

(M) Asthma prevention services as described in the approved Medi-Cal State Plan.

(N) Dyadic services as described in Section 14132.755.

(O) Medication therapy management services as described in Section 14132.969.

(P) Clinical laboratory services, as defined in Section 51137.2 of Title 22 of the California Code of Regulations, that are 2019 Novel Coronavirus (COVID-19) diagnostic testing or specimen collection services, as determined by the department.

(Q) Blood banks, as described in Section 51052 of Title 22 of the California Code of Regulations.

(R) Occupational therapy, as described in Section 51085 of the California Code of Regulations.

(S) Orthotists, as described in Section 51101 of Title 22 of the California Code of Regulations.

(T) Psychologists, as described in Section 51099 of Title 22 of the California Code of Regulations.

(U) Medical social work or medical social services, as described in Section 51147 of Title 22 of the California Code of Regulations.

(V) Speech pathologists, as described in Section 51095 of Title 22 of the California Code of Regulations.

(W) Outpatient heroin detoxification services, as described in Section 51116 of Title 22 of the California Code of Regulations.

(X) Dispensing opticians, as described in Section 51090 of Title 22 of the California Code of Regulations.

(Y) Optometrists, including optometry groups, as described in Section 51091 of Title 22 of the California Code of Regulations.

(Z) Acupuncturists, as described in Section 51074 of Title 22 of the California Code of Regulations.

(AA) Portable imaging services, as described in Section 51193.1 of Title 22 of the California Code of Regulations.

(AB) The following primary care or specialty clinics, as determined by the department:

(i) Community clinics, as defined in Section 1204 of the Health and Safety Code.

(ii) Free clinics, as defined in Section 1204 of the Health and Safety Code.

(iii) Surgical clinics, as defined in Section 1204 of the Health and Safety Code.

(iv) Rehabilitation clinics, as defined in Section 1204 of the Health and Safety Code.

(v) Clinics exempt from licensure under Section 1206 of the Health and Safety Code, including nonhospital county-operated community clinics.

(AC) Services provided under the California Children’s Services Program, established pursuant to Article 5 (commencing with Section 123845) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code, and under the Genetically Handicapped Persons Program, established pursuant to Article 1 (commencing with Section 125125) of Chapter 2 of Part 5 of Division 106 of the Health and Safety Code, as determined by the department.

(AD) Community-Based Adult Services (CBAS), as described in Section 14186.3 and as covered pursuant to subdivision (e) of Section 14184.201.

(14) For dates of service on and after January 1, 2023, or the effective date of any necessary federal approvals as required by subdivisions (n) and (o), whichever is later, both of the following providers:

(A) Podiatrists, as described in Section 51075 of Title 22 of the California Code of Regulations.

(B) Prosthetists, as described in Section 51103 of Title 22 of the California Code of Regulations.

(15) For dates of service on and after January 1, 2024, or the effective date of the payments implemented pursuant to subdivision (a) of Section 14105.201, whichever is later, all of the following services and providers:

(A) Primary care services, including those provided by physicians or nonphysician health professionals, as defined in Section 51170.5 of Title 22 of the California Code of Regulations.

(B) Obstetric care services and doula services as described in Section 14132.24.

(C) Outpatient mental health services that are not the financial responsibility of county mental health plans operating pursuant to Chapter 8.9 (commencing with Section 14700).

(16) (A) For dates of service on and after January 1, 2025, or the effective dates of the payments implemented pursuant to Sections 14124.163 and 14124.165, whichever is later, as applicable, all of the following services and providers:

(i) Physician and professional services subject to reimbursement pursuant to Section 14124.163.

(ii) Abortion services, as defined in subdivision (d) of Section 14124.161, subject to reimbursement pursuant to Section 14124.165.

(B) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, this paragraph shall be inoperative as of January 1, 2025.

(i) Subject to the exception for services listed in subdivision (h), the payment reductions required by subdivision (d) shall apply to the benefits rendered by any provider who may be authorized to bill for the service, including, but not limited to, physicians, podiatrists, nurse practitioners, certified nurse-midwives, nurse anesthetists, and organized outpatient clinics.

(j) Notwithstanding any other law, for dates of service on and after June 1, 2011, Medi-Cal reimbursement rates applicable to the following classes of providers shall not exceed the reimbursement rates that were applicable to those classes of providers in the 2008–09 rate year, as described in subdivision (f) of Section 14105.191, reduced by 10 percent:

(1) Intermediate care facilities, excluding those facilities identified in paragraph (2) of subdivision (f). For purposes of this section, “intermediate care facility” has the same meaning as defined in Section 51118 of Title 22 of the California Code of Regulations.

(2) Skilled nursing facilities that are distinct parts of general acute care hospitals. For purposes of this section, “distinct part” has the same meaning as defined in Section 72041 of Title 22 of the California Code of Regulations.

(3) Rural swing-bed facilities.

(4) Subacute care units that are, or are parts of, distinct parts of general acute care hospitals. For purposes of this paragraph, “subacute care unit” has the same meaning as defined in Section 51215.5 of Title 22 of the California Code of Regulations.

(5) Pediatric subacute care units that are, or are parts of, distinct parts of general acute care hospitals. For purposes of this paragraph, “pediatric subacute care unit” has the same meaning as defined in Section 51215.8 of Title 22 of the California Code of Regulations.

(6) Adult day health care centers.

(7) Freestanding pediatric subacute care units, as defined in Section 51215.8 of Title 22 of the California Code of Regulations.

(k) 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 and administer this section by means of provider bulletins or similar instructions, without taking regulatory action.

(l) The reductions described in this section shall apply only to payments for services when the General Fund share of the payment is paid with funds directly appropriated to the department in the annual Budget Act and shall not apply to payments for services paid with funds appropriated to other departments or agencies.

(m) Notwithstanding this section, the payment reductions and adjustments provided for in subdivision (d) shall be implemented only if the director determines that the payments that result from the application of this section comply with applicable federal Medicaid program requirements and that federal financial participation will be available.

(1) In determining whether federal financial participation is available, the director shall determine whether the payments comply with applicable federal Medicaid program requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code.

(2) To the extent that the director determines that the payments do not comply with the federal Medicaid program requirements or that federal financial participation is not available with respect to any payment that is reduced pursuant to this section, the director shall retain the discretion to not implement the particular payment reduction or adjustment and may adjust the payment as necessary to comply with federal Medicaid program requirements.

(n) The department shall seek any necessary federal approvals for the implementation of this section.

(o) (1) The payment reductions and adjustments set forth in this section shall not be implemented until federal approval is obtained.

(2) To the extent that federal approval is obtained for one or more of the payment reductions and adjustments in this section and Section 14105.07, the payment reductions and adjustments set forth in Section 14105.191 shall cease to be implemented for the same services provided by the same class of providers. If there is a conflict between this section and Section 14105.191, other than the provisions setting forth a payment reduction or adjustment, this section shall govern.

(3) When federal approval is obtained, the payments resulting from the application of this section shall be implemented retroactively to June 1, 2011, or on any other date or dates, as may be applicable.

(4) The director may clarify the application of this subdivision by means of provider bulletins or similar instructions, pursuant to subdivision (k).

(p) Adjustments to pharmacy drug product payment pursuant to this section shall no longer apply when the department determines that the average acquisition cost methodology pursuant to Section 14105.45 has been fully implemented and the department’s pharmacy budget reduction targets, consistent with payment reduction levels pursuant to this section, have been met.

history: (History: Amended by Stats. 2024, Ch. 40, Sec. 55. (SB 159) Effective June 29, 2024. Note: Condition in paragraph (2) of subdivision (f) was satisfied by addition of Section 14105.07 by Stats. 2011, Ch. 3.)

article: 3. Administration


text:
(a) (1) Notwithstanding paragraph (7) of subdivision (j) of Section 14105.192 and any other law, beginning June 1, 2011, reimbursement rates for freestanding pediatric subacute care units, as defined in Section 51215.8 of Title 22 of the California Code of Regulations, shall be the applicable rate for the 2008–09 rate year, reduced by 5.75 percent, plus the projected cost of complying with new state or federal mandates.

(2) The department shall recalculate and publish the rates specified in paragraph (1) for any of the following reasons:

(A) If the federal Centers for Medicare and Medicaid Services (CMS) does not approve exemption changes to the facilities subject to the skilled nursing facility quality assurance fee pursuant to paragraph (4) of subdivision (c) of Section 1324.20 of the Health and Safety Code.

(B) If CMS does not approve any proposed modification to the methodology for calculation of the skilled nursing quality assurance fee pursuant to Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code.

(C) To ensure that the state does not incur any additional General Fund expenses for reimbursement to pediatric subacute care units for dates of service on and after June 1, 2011.

(D) If the difference in the projected skilled nursing quality assurance fee collections for the 2011–12 rate year, pursuant to Article 7.6 (commencing with Section 1324.20) of Chapter 2 of Division 2 of the Health and Safety Code, would result in any additional General Fund expense to pay for the 2011–12 rate year reimbursement rate.

(b) The reductions described in this section shall apply only to payments for services when the General Fund share of the payment is paid with funds directly appropriated to the department in the annual Budget Act and shall not apply to payments for services paid with funds appropriated to other departments or agencies.

(c) 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 and administer this section by means of provider bulletins, or similar instructions, without taking regulatory action.

(d) The payment reductions and adjustments provided for in this section shall be implemented only if the director determines that the payments that result from the application of this section will comply with applicable federal Medicaid requirements and that federal financial participation will be available.

(1) In determining whether federal financial participation is available, the director shall determine whether the payments comply with applicable federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code.

(2) To the extent that the director determines that the payments do not comply with the federal Medicaid requirements or that federal financial participation is not available with respect to any payment that is reduced pursuant to this section, the director retains the discretion not to implement the particular payment reduction or adjustment and may adjust the payment as necessary to comply with federal Medicaid requirements.

(e) The department shall seek any necessary federal approvals for the implementation of this section.

(f) This section shall not be implemented until federal approval is obtained. When federal approval is obtained, the payments resulting from the application of this section shall be implemented retroactively to June 1, 2011, or on any other date or dates as may be applicable.

history: (History: Amended by Stats. 2012, Ch. 162, Sec. 214. (SB 1171) Effective January 1, 2013.)

article: 3. Administration


text:
(a) (1) Notwithstanding Sections 14105.191, 14105.192, and 14105.193, and for dates of service on or after August 1, 2021, the reimbursement rates for freestanding pediatric subacute care units, as defined in Section 51215.8 of Title 22 of the California Code of Regulations, shall be determined without applying any reductions or limitations as set forth under Sections 14105.191, 14105.192, and 14105.193.

(2) For dates of service on or after August 1, 2021, and for each rate year thereafter, the department shall calculate and publish the reimbursement rates, as specified in paragraph (1), plus the projected cost of complying with new state or federal mandates.

(3) For the 2021–22 fiscal year, and for each fiscal year thereafter, the reimbursement rates for freestanding pediatric subacute care units shall account for, and be inclusive of, supplemental payments, as described under the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, or Proposition 56, if the Budget Act of that fiscal year appropriates funds from the Healthcare Treatment Fund, as established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, to the department to make those supplemental payments to the freestanding pediatric subacute care units.

(4) Effective for dates of service August 1, 2022, to December 31, 2023, inclusive, the reimbursement rates for freestanding pediatric subacute care units shall continue to be the reimbursement rate in effect on August 1, 2022, inclusive of any federally authorized temporary Medicaid payments.

(5) Effective for dates of service on or after January 1, 2024, the department shall adopt a rate year based on the calendar year for freestanding pediatric subacute care units.

(6) Effective for rate years beginning on or after January 1, 2024, the reimbursement rates for freestanding pediatric subacute care units shall be no less than the reimbursement rate, inclusive of the federally authorized temporary increased Medicaid payments or an equivalent amount described in paragraph (4), in effect for that facility on December 31, 2023.

(b) In implementing this section, the department shall seek any federal approvals it deems necessary. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(c) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking regulatory action.

(d) (1) The department may modify any methodology or provision specified in this section 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, only if that modification does not violate the spirit, purposes, and intent of this section.

(2) If the department determines that a modification is necessary pursuant to paragraph (1), the department shall consult with affected providers and stakeholders to the extent practicable.

history: (History: Amended by Stats. 2023, Ch. 42, Sec. 138. (AB 118) Effective July 10, 2023.)

article: 3. Administration


text:
(a) Notwithstanding Sections 14105.191 and 14105.192, the department shall not seek to retroactively implement the reductions and limitations to the reimbursement for services provided by skilled nursing facilities that are distinct parts of general acute care hospitals set forth in Sections 14105.191 and 14105.192 for dates of service on or after June 1, 2011, and on or before September 30, 2013. For purposes of this section, “distinct part” has the same meaning as defined in Section 72041 of Title 22 of the California Code of Regulations.

(b) The department shall not seek to recoup any overpayments from skilled nursing facilities that are distinct parts of general acute care hospitals resulting from the reductions and limitations to the reimbursement for these facilities pursuant to Sections 14105.191 and 14105.192 for dates of service on or after June 1, 2011, and on or before September 30, 2013.

(c) 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 this section by means of provider bulletins or notices, policy letters, or other similar instructions, without taking regulatory action.

history: (History: Added by Stats. 2016, 2nd Ex. Sess., Ch. 3, Sec. 14. (AB 1 2x) Effective June 9, 2016.)

article: 3. Administration


text:
(a) For dates of service on and after July 1, 2022, or the effective date of any necessary federal approvals as required by subdivision (b), whichever is later, the reimbursement rates or payments for all of the following services and providers may be maintained, using General Fund or other state funds appropriated to the department as the state share, at the payment levels in effect on December 31, 2021, including supplemental payments or rate increases, or both, as applicable, under the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56, an initiative measure approved at the November 8, 2016, statewide general election) that were implemented with funds from the Healthcare Treatment Fund, as established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code:

(1) Case management services provided under the Medi-Cal HIV/AIDS Waiver Program.

(2) Targeted payments for qualifying providers of Community-Based Adult Services (CBAS), as described in Section 14186.3 and subdivision (d) of Section 14184.201, based on criteria established and updated by the department, which may include, but need not be limited to, higher operating costs for CBAS providers in certain areas of the state.

(3) Developmental screenings for individuals zero to three years of age, inclusive, as described in Section 14132.195.

(4) Adverse Childhood Experiences (ACEs) trauma screenings.

(5) Nonemergency medical transportation.

(6) Home health providers of medically necessary in-home services for children and adults in the Medi-Cal fee-for-service system or through home and community-based services waivers.

(7) Pediatric day health care facilities in the Medi-Cal fee-for-service system.

(b) In implementing this section, the department shall seek any federal approvals it deems necessary. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(c) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking any further regulatory action.

(d) The department shall develop the eligibility criteria, methodologies, and parameters for the payments and rate increases maintained pursuant to subdivision (a), and may revise the eligibility criteria, methodologies, and parameters, for purposes including, but not limited to, obtaining or maintaining any necessary federal approvals as required by subdivision (b).

history: (History: Added by Stats. 2022, Ch. 47, Sec. 91. (SB 184) Effective June 30, 2022.)

article: 3. Administration


text:
(a) The Medi-Cal Provider Payment Reserve Fund is hereby created in the State Treasury.

(b) Notwithstanding Section 16305.7 of the Government Code, any interest and dividends earned on moneys in the Medi-Cal Provider Payment Reserve Fund shall be retained in the fund and used solely for the purposes specified in this section.

(c) (1) Subject to an appropriation made by the Legislature, the department shall use the funds transferred to the Medi-Cal Provider Payment Reserve Fund pursuant to paragraph (3) of subdivision (d) of Section 14199.82 for purposes of funding targeted increases to Medi-Cal payments or other investments that advance access, quality, and equity for Medi-Cal beneficiaries and promote provider participation in the Medi-Cal program.

(2) The expenditures of funds appropriated pursuant to paragraph (1) shall include, but not be limited to, all of the following:

(A) Increased costs incurred as a result of the reimbursement requirements established in Section 14105.201.

(B) Transfers authorized in paragraph (2) of subdivision (e) of Section 129385 of the Health and Safety Code.

(C) Transfers, or an appropriation in the annual Budget Act, to the Small and Rural Hospital Relief Fund, as established in Section 130077 of the Health and Safety Code, in the amount of fifty million dollars ($50,000,000) in state fiscal year 2023–24 to support the Small and Rural Hospital Relief Program for seismic assessment and construction.

(d) The department shall provide an annual report to all health plans accounting for the funds deposited in, and expended from, the Medi-Cal Provider Payment Reserve Fund, in a time and manner deemed appropriate by the director.

(e) Notwithstanding any other law, the Controller may use the funds in the Medi-Cal Provider Payment Reserve Fund for cashflow loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code.

(f) If the voters approve the addition of Chapter 7.5 (commencing with Section 14199.100) to this part at the November 5, 2024, statewide general election, this section shall become operative on January 1, 2025.

history: (History: Repealed (in Sec. 56) and added by Stats. 2024, Ch. 40, Sec. 57. (SB 159) Effective June 29, 2024. Operative January 1, 2025, by its own provisions. Inoperative on date prescribed by Section 14199.103. Repealed one year after inoperative date, pursuant to Section 14199.103.)

article: 3. Administration


text:
(a) (1) Notwithstanding any other law, for dates of service no sooner than January 1, 2024, or on the effective date of any necessary federal approvals as required by subdivision (d), whichever is later, the reimbursement rates for the following services, as determined in accordance with subdivision (f), shall be the greater of 87.5 percent of the lowest maximum allowance established by the federal Medicare Program for the same or similar services or the level of reimbursement, which shall account for, and be inclusive of, the exemption of these services from payment reductions pursuant to Section 14105.192, and supplemental payments or rate increases, or both, as applicable, under the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56, an initiative measure approved at the November 8, 2016, statewide general election) that were implemented with funds from the Healthcare Treatment Fund, as established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, in effect as of December 31, 2023, as determined by the department:

(A) Primary care services, including those provided by physicians or nonphysician health professionals, as defined in Section 51170.5 of Title 22 of the California Code of Regulations.

(B) Obstetric care services, and doula services as described in Section 14132.24.

(C) Outpatient mental health services that are not the financial responsibility of county mental health plans operating pursuant to Chapter 8.9 (commencing with Section 14700).

(2) The department shall annually review and revise the reimbursement rates in accordance with paragraph (1) based on changes to the lowest maximum allowance established by the federal Medicare Program for the same or similar services. Any revisions to the reimbursement rates determined in accordance with paragraph (1) shall be considered as part of the annual budget development process and take effect beginning on January 1, 2025, and each subsequent January 1 thereafter, of the calendar year following the department’s annual review.

(3) The department shall develop and implement a methodology for establishing reimbursement rates or payments for the services described in paragraph (1) where there is no specified maximum allowable rate established by the federal Medicare Program. The department shall review this methodology annually and may, in its sole discretion, modify the methodology on a prospective basis.

(b) (1) (A) For contract periods during which subdivision (a) is implemented, each Medi-Cal managed care plan shall reimburse a network provider furnishing the services subject to subdivision (a) at least the amount the network provider would be paid for those services in the Medi-Cal fee-for-service delivery system, as set forth by the department in the approved Medi-Cal State Plan and guidance issued pursuant to subdivision (e).

(B) Medi-Cal managed care plans that reimburse a network provider furnishing the services identified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (a) on a capitated basis shall ensure that the network provider receives reimbursement that is equal to, or projected to be equal to, the level of reimbursement required in subparagraph (A) for the applicable services and, as applicable, shall increase reimbursement to the network provider to comply with this subparagraph.

(2) (A) The department shall direct Medi-Cal managed care plans to reimburse eligible providers furnishing the services subject to subdivision (a) in accordance with paragraph (1) using one or more methodologies pursuant to Section 438.6(c) of Title 42 of the Code of Federal Regulations, and as set forth by the department in guidance issued pursuant to subdivision (e).

(B) Commencing with the first managed care rating period for which the department documents in the annual rate certification that the base period data submitted and attested to by Medi-Cal managed care plans that is used by the department for the development of capitation rates for the Medi-Cal managed care delivery system reflects the increased reimbursement levels for services subject to subdivision (a), the department may elect to discontinue some or all of the directed payment methodologies implemented pursuant to subparagraph (A) following consultation with affected stakeholders and the department’s determination that the methodologies are administratively burdensome and likely to be no longer necessary to achieve, in aggregate, the reimbursement levels described in paragraph (1).

(3) The department may require Medi-Cal managed care plans and network providers of the applicable services to submit information the department deems necessary to implement and monitor compliance with this subdivision, at the times and in the form and manner specified by the department.

(c) (1) The payments implemented pursuant to subdivisions (a) and (b) shall be supported by the managed care organization provider tax revenue, pursuant to Article 7.2 (commencing with Section 14199.90), or other state funds appropriated to the department as the state share for this purpose, including, but not limited to, funds transferred to the Medi-Cal Provider Payment Reserve Fund in accordance with Sections 14105.200 and 14199.82 and to the Healthcare Treatment Fund in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

(2) Notwithstanding any other law, increases to fee-for-service reimbursement rates and managed care directed payments that are made pursuant to subdivisions (a) and (b) constitute increases in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, and all other fee-for-service supplemental payments and managed care directed payments for the services identified in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (a) that are made pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code shall be discontinued on the date the payments implemented pursuant to subdivisions (a) and (b) are effective.

(d) In implementing this section, the department shall seek any federal approvals that it deems necessary. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(e) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this section, in whole or in part, by means of all-county letters, plan letters, provider bulletins, information notices, or other similar instructions, without taking any further regulatory action.

(f) The department shall develop the methodologies and parameters for the payments implemented pursuant to subdivisions (a) and (b), and may revise the methodologies and parameters, for purposes including, but not limited to, obtaining or maintaining any necessary federal approvals as required by subdivision (d).

(g) For purposes of this section, the following definitions shall apply:

(1) “Medi-Cal managed care plan” has the same meaning as that term is defined in subdivision (j) of Section 14184.101.

(2) “Network provider” has the same meaning as that term is defined in Section 438.2 of Title 42 of the Code of Federal Regulations.

(h) The Legislature finds and declares that this section, as it pertains to funding made available for expenditure pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code, is consistent and in accordance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56, an initiative measure approved at the November 8, 2016, statewide general election).

history: (History: Amended by Stats. 2026, Ch. 24, Sec. 1. (SB 125) Effective June 29, 2026.)

article: 3. Administration


text: Notwithstanding Section 51501(a) of Title 22 of the California Code of Regulations, donation of, or discounts for, clinical laboratory tests or examinations or laboratory services to a federally qualified health center, as defined in Section 1396d(l)(2)(B) of Title 42 of the United States Code, for the purpose of serving its uninsured patients, shall not be considered as a basis for the reduction of Medi-Cal payments below the reimbursement rate established pursuant to Section 14105.22.

history: (History: Added by Stats. 2012, Ch. 738, Sec. 1. (AB 969) Effective January 1, 2013.)

article: 3. Administration


text:
(a) Notwithstanding Section 14105.22, the department shall not seek to retroactively implement the reductions and limitations to the reimbursement for clinical laboratory or laboratory services set forth in Section 14105.22 for dates of service from January 1, 2020, to June 30, 2021, inclusive. The payment reductions implemented pursuant to Section 14105.192 shall continue to apply for clinical laboratory or laboratory services.

(b) The department shall not seek to recoup any overpayments for clinical laboratory or laboratory services resulting from the reductions and limitations to the reimbursement for clinical laboratory or laboratory services pursuant to Section 14105.22 for dates of service from January 1, 2020, to June 30, 2021, inclusive. Any overpayments for clinical laboratory or laboratory services resulting from the reductions implemented pursuant to Section 14105.192 shall continue to be recouped.

(c) For dates of service from July 1, 2021, to June 30, 2022, inclusive, the department shall establish the reimbursement rates for clinical laboratory or laboratory services at the rates in effect and approved in the Medi-Cal State Plan as of December 31, 2019.

(d) For dates of services on or after July 1, 2022, the department shall establish the reimbursement rates for clinical laboratory or laboratory services pursuant to Section 14105.22.

(e) 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 this section, in whole or in part, by means of provider bulletins or notices, policy letters, or other similar instructions, without taking any further regulatory action.

(f) The department shall implement this section in a manner that is consistent with federal Medicaid law and regulations. The department shall seek any necessary federal approvals for the implementation of this section. This section shall be implemented only to the extent that federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

history: (History: Added by Stats. 2021, Ch. 143, Sec. 377. (AB 133) Effective July 27, 2021.)

article: 3. Administration


text:
(a) The Legislature finds and declares all of the following:

(1) That because the implementation of Section 14105.28 is expected to require several years and further rate changes may make the transition to an inpatient hospital reimbursement methodology based on diagnosis-related groups more difficult, and because of the need to take into account the amount of base payments when combined with supplemental payments made to inpatient hospitals, including payments provided as a result of the hospital fee set forth in Article 5.22 (commencing with Section 14167.31) and Article 5.225 (commencing with Section 14167.41), it is necessary to impose the rate freeze enacted in this section.

(2) (A) Upon implementation of Article 5.21 (commencing with Section 14167.1) and Article 5.22 (commencing with Section 14167.31), as added by Assembly Bill 1383 of the 2009–10 Regular Session, supplemental payments shall be made to hospitals that have contracts negotiated pursuant to the Selective Provider Contracting Program, provided that rates under these contracts are not reduced below the contract rates in effect on the effective date of Article 5.21 (commencing with Section 14167.1), as added by Assembly Bill 1383 of the 2009–10 Regular Session.

(B) Assembly Bill 1383 of the 2009–10 Regular Session was signed into law on October 11, 2009, and the effective date of Article 5.21 (commencing with Section 14167.1) was January 1, 2010. Therefore, in consideration of the notice provided by Assembly Bill 1383 of the 2009–10 Regular Session, and in further consideration that the negotiated contract rates in effect on January 1, 2010, or the rates in effect on July 1, 2010, to the extent those rates are lower than the rates in effect on January 1, 2010, as provided in paragraph (1) of subdivision (c), are sufficient to conform with the standards set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code, as well as the existence of supplemental payments to be made under Article 5.21 (commencing with Section 14167.1), the Legislature exercises its discretion, in consultation with the department, to freeze rates at the levels in effect for these hospitals on January 1, 2010, or the rates in effect on July 1, 2010, to the extent that those rates are lower than the rates in effect on January 1, 2010, as provided in paragraph (1) of subdivision (c).

(3) The freeze shall remain in effect during the period of time supplemental payments are made under Article 5.21 (commencing with Section 14167.1), and thereafter, to the extent that the rates, alone or in combination with any available supplemental payments, are consistent with federal law as provided in this section.

(b) Notwithstanding any other provision of law, in order to develop and implement changes in the methodology for payments for hospital inpatient services, the director shall freeze rates applicable to inpatient hospital services, as specified in this section.

(c) (1) Reimbursement rates for inpatient hospital services for all hospitals, except designated public hospitals, as defined in subdivision (d) of Section 14166.1, that receive Medi-Cal reimbursement from the State Department of Health Care Services, both under contract with the Selective Provider Contracting Program as well as noncontract hospitals, shall be frozen to the lesser of the amount paid on January 1, 2010, or the amount paid on July 1, 2010. The rate freeze shall be in effect for reimbursements for inpatient hospital services provided to Medi-Cal beneficiaries beginning on July 1, 2010, through and including the date on which the Medicaid Management Information System converts to claim processing based on the new reimbursement methodology developed pursuant to Section 14105.28 and described in paragraph (1) of subdivision (b) of that section.

(2) In the event a contract hospital terminates its contract and becomes a noncontract hospital, the hospital shall receive the same rate or rates as provided in paragraph (1) as a contract hospital for inpatient hospital services provided to Medi-Cal eligible individuals while the rate freeze specified in paragraph (1) remains in effect.

(3) This section nullifies any agreement between the state and a hospital for rate adjustments that would be inconsistent with this section. Other provisions of any of those agreements shall be unchanged by this section.

(4) In the event a noncontract hospital elects to become a contract hospital after July 1, 2010, at a negotiated rate or negotiated rates less than the freeze amount provided in paragraph (1), the hospital shall receive the contract rate or rates while the freeze remains in effect.

(d) For purposes of this section, the reimbursement for inpatient hospital services includes the amounts paid for all categories of inpatient services allowable by Medi-Cal and shall not include any supplemental payments. The reimbursement includes the amounts paid for routine services together with all related ancillary services.

(e) Within 90 days of the date this section becomes effective, the department shall develop and provide to all hospitals the methodology that will be utilized to implement the rate freeze required by this section for noncontract hospitals.

(f) (1) For dates of service on and after July 1, 2010, the department shall reconcile the payments, as limited by subdivision (c), to the amounts that the hospitals, that are subject to the new methodology set forth in Section 14105.28, would have received if the new methodology had been in effect. The department shall identify the data that will be used in making the reconciliations.

(2) The department shall implement the reconciliation process on the date that the payment methodology based on diagnosis-related groups has been made final, but no later than June 30, 2012. The director shall execute a declaration stating the date on which the new payment methodology has become final.

(3) In the process of reconciliation, no payment, with respect to dates of service prior to the effective date of the act that added this section, shall be reduced below the amount paid pursuant to subdivision (c).

(4) Rates paid to hospitals, or for specified services, that are not subject to the methodology in paragraph (1) of subdivision (b) of Section 14105.28, shall be increased subject to the annual Budget Act.

(g) Notwithstanding subdivision (c) or any other provision of this section, for the 2011–12 fiscal year and each fiscal year thereafter, or portion thereof, in which subdivision (c) remains in effect, the department shall, subject to an appropriation in the annual Budget Act applicable to the particular fiscal year, apply an increase in reimbursement rates for all hospital services that result from the freeze imposed pursuant to subdivision (c).

(h) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may take the actions specified in this section by means of provider bulletins or notices, policy letters, or other similar instructions, without taking regulatory action.

(i) (1) The rates provided for in this section shall be implemented only if the director determines that the rates, as established by this section, will comply with applicable federal Medicaid requirements and that federal financial participation will be available.

(2) In assessing whether federal financial participation is available, the director shall determine whether the rates comply with applicable federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code.

(3) To the extent that the director determines that the rates do not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with federal Medicaid requirements.

(j) The director shall seek any necessary federal approval for the implementation of this section. To the extent that federal financial participation is not available with respect to any rate of reimbursement described by this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(k) Subdivisions (a) to (g), inclusive, shall become inoperative, and any rate that was frozen pursuant to this section shall be restored retroactively to the rate that would have been in effect absent this section, on the effective date of the act that added this subdivision. The department shall explore other avenues that do not involve a rate freeze for achieving the stability needed, including determining base payment rates, in order to transition to an inpatient hospital reimbursement methodology based on diagnosis-related groups.

history: (History: Amended by Stats. 2011, Ch. 19, Sec. 2. (SB 90) Effective April 13, 2011. Subds. (a) through (g) became inoperative on April 13, 2011, pursuant to subd. (k), which was inserted by Ch. 19.)

article: 3. Administration


text:
(a) (1) Subject to subdivision (d), additional Medi-Cal payments shall be made to district and municipal hospitals and their affiliated government entities, in recognition of the Medi-Cal managed care share of graduate medical education costs. To the extent permissible under federal law, the department shall make these payments directly to the district and municipal hospitals and their applicable affiliated government entities.

(2) The graduate medical education payments described in paragraph (1) shall be made in a manner consistent with the methodology for graduate medical education payments to designated public hospitals and their affiliated government entities pursuant to Section 14105.29, and shall consist of the components described in paragraph (2) of subdivision (a) of Section 14105.29.

(b) Subject to subdivision (d), the department may, in consultation with district and municipal public hospitals, seek federal approval to provide for other forms of graduate medical education payments to district and municipal public hospitals and their affiliated government entities, including payments that reflect the volume of fee-for-service Medi-Cal services or revenue to the extent the fee-for-service payments do not otherwise recognize graduate medical education costs, or incentive payments.

(c) The nonfederal share of payments under this section shall consist of voluntary intergovernmental transfers of funds provided by district and municipal public hospitals or their affiliated government entities, or other eligible public entities, including those described in Section 14164, in accordance with this section. No state General Fund moneys shall be used to fund the nonfederal share of payments under this section.

(1) The District and Municipal Public Hospitals (DMPH) Graduate Medical Education (GME) Special Fund is hereby established in the State Treasury. Notwithstanding Section 13340 of the Government Code, moneys deposited into the DMPH GME Special Fund shall be continuously appropriated, without regard to fiscal year, to the department for the purposes specified in this section. All funds derived pursuant to this section shall be deposited into the State Treasury to the credit of the DMPH GME Special Fund.

(2) The DMPH GME Special Fund shall consist of moneys that a district and municipal public hospital or affiliated government entity, or other public entity, as applicable, elects to transfer to the department for deposit into the fund, to the extent permitted under Section 433.51 of Title 42 of the Code of Federal Regulations and any other applicable federal Medicaid laws. Moneys derived from these intergovernmental transfers in the DMPH GME Special Fund shall be used as the source for the nonfederal share of graduate medical education payments authorized under this section, for reimbursing the department’s administrative costs in implementing this section, and to otherwise support the Medi-Cal program. The timing and amounts of the intergovernmental transfers shall be determined by the department in consultation with the transferring entities. The department shall determine the intergovernmental transfer amounts for each applicable state fiscal year such that they are sufficient to fund the nonfederal share of the associated graduate medical education payments for that year, plus 5 percent of the aggregate nonfederal share that would be associated with the graduate medical education payments made pursuant to this section in that applicable state fiscal year as if the federal medical assistance percentage were 50 percent. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to applicable federal Medicaid laws, and in the form and manner as required by the department.

(3) The department shall claim federal financial participation for graduate medical education payments under this section using moneys derived from intergovernmental transfers made pursuant to this section, and deposited into the DMPH GME Special Fund to the full extent permitted by law. If federal financial participation is not available with respect to a payment under this section, and either is not obtained or results in a recoupment of payments already made, the department shall return any intergovernmental transfer fund amounts associated with the payment for which federal financial participation is not available to the applicable transferring entities within 14 days from the date of the associated recoupment or other determination, as applicable.

(4) Any intergovernmental transfer of funds made pursuant to this section shall be considered voluntary for purposes of all federal and state laws.

(d) (1) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(2) After consultation with the district and municipal public hospitals, the director may modify the requirements set forth in this section to the extent necessary to meet federal requirements for graduate medical education payments for district and municipal public hospitals and their affiliated government entities or to maximize federal financial participation available under such a program.

(e) (1) The department shall seek any necessary federal approvals from the federal Centers for Medicare and Medicaid Services, through state plan amendments or otherwise, for graduate medical education payments, effective no sooner than January 1, 2026, in accordance with this section.

(2) The department shall consult with the district and municipal public hospitals with regard to the development and implementation, and any subsequent modification, of the payment programs established pursuant to this section.

(3) 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, or make specific this section by means of all-county letters, plan letters, provider bulletins, or other similar instructions, without taking regulatory action. The department shall timely inform, or provide access to, applicable guidance issued pursuant to this authority to affected district and municipal hospitals and their affiliated government entities. This guidance shall remain publicly available until all payments made pursuant to this section are finalized.

(f) For purposes of this section, the following definitions apply:

(1) “Affiliated government entity” means a government entity or agency with which a district and municipal public hospital is affiliated, inclusive of its affiliated government-operated physician practice groups, affiliated government-operated clinics and other settings that provide clinical training, and affiliated government-operated medical and professional training schools and programs.

(2) “District and municipal public hospital” means a nondesignated public hospital as that term is defined in subdivision (f) of Section 14166.1.

history: (History: Added by Stats. 2025, Ch. 308, Sec. 1. (SB 246) Effective January 1, 2026.)

article: 3. Administration


text: State and federal rebates that are owed to the state for drugs dispensed to Medi-Cal beneficiaries shall not be reduced to the state if a manufacturer reports, to the federal Centers for Medicare and Medicaid Services or the department, a revised drug product’s average manufacturer price or best price as these terms are defined pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) for any calendar quarter in which the rebate was due.

history: (History: Amended by Stats. 2011, Ch. 3, Sec. 96. (AB 97) Effective March 24, 2011.)

article: 3. Administration


text:
(a) Notwithstanding any other law, upon approval of the Department of Finance, the department shall seek the necessary federal approvals to establish and administer a drug rebate program to collect rebate payments from drug manufacturers with respect to drugs furnished to selected populations of California residents that are ineligible for full-scope Medi-Cal benefits under this chapter.

(b) The department shall administer the drug rebate program for qualified non-Medi-Cal populations consistent with the applicable requirements and procedures of the federal Medicaid Drug Rebate Program implemented pursuant to Section 14105.33 and Section 1396r-8 of Title 42 of the United States Code.

(c) The department, in consultation with the Department of Finance, shall determine the non-Medi-Cal populations to be included in the drug rebate program administered pursuant to this section based on the level to which the department can demonstrate that their inclusion furthers the goals and objectives of the Medi-Cal program, increases the efficiency and economy of the Medi-Cal program, and sufficiently benefits the Medi-Cal population as a whole.

(d) The department shall seek any federal approvals from the federal Centers for Medicare and Medicaid Services, via submission of State Plan Amendments or other applicable mechanism, it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.

(e) 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, or make specific this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking regulatory action.

(f) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis with manufacturers of single-source and multiple-source drugs. Contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. Contracts entered into or amended pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

(g) Any rebate payments collected from manufacturers pursuant to this section shall be deposited in the Medi-Cal Drug Rebate Fund, created pursuant to Section 14105.36.

history: (History: Amended by Stats. 2021, Ch. 615, Sec. 451. (AB 474) Effective January 1, 2022. Operative January 1, 2023, pursuant to Sec. 463 of Stats. 2021, Ch. 615.)

article: 3. Administration


text:
(a) The department may implement utilization controls through the establishment of guidelines, protocols, algorithms, or criteria for drugs, medical supplies, durable medical equipment, and enteral formulae. The department shall publish the guidelines, protocols, algorithms, or criteria in the pharmacy and medical provider manuals.

(b) The department shall issue providers written notice of changes pursuant to subdivision (a) at least 30 days prior to implementation.

(c) Changes made pursuant to this section are exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law. The department shall consult with interested parties and appropriate stakeholders in implementing this section with respect to all of the following:

(1) Notifying the provider representatives of the proposed change.

(2) Scheduling at least one meeting to discuss the change.

(3) Allowing for written input regarding the change.

(4) Providing advance notice on the implementation and effective date of the change.

history: (History: Added by Stats. 2003, Ch. 230, Sec. 66. Effective August 11, 2003.)

article: 3. Administration


text:
(a) A Medi-Cal beneficiary, within 90 days of receipt of the director’s notice to beneficiaries pursuant to subdivision (i) of Section 14105.33, informing them of the decision to delete or suspend a drug from the list of contract drugs, may request a fair hearing pursuant to Chapter 7 (commencing with Section 10950) of Part 2.

(b) Any beneficiary filing a fair hearing request regarding the deletion or suspension of a drug from the list of contract drugs shall be granted a treatment authorization request for that drug until a final decision is adopted by the director. Should the beneficiary seek judicial review of the director’s decision, a treatment authorization request shall be granted for that drug until a final decision is issued by the court.

(c) (1) Any Medi-Cal beneficiary, within one year of the director’s decision pursuant to Section 10959, may file a petition with the superior court, under the provisions of Section 1094.5 of the Code of Civil Procedure, praying for a review of both the legal and factual basis for the director’s decision.

(2) The director shall be the sole respondent in these proceedings.

(d) Any Medi-Cal beneficiary injured as a result of being denied a drug which is determined to be medically necessary may sue for injunctive or declaratory relief to review the director’s decision to delete or suspend a drug from the list of contract drugs.

history: (History: Amended by Stats. 2002, Ch. 1161, Sec. 66. Effective September 30, 2002.)

article: 3. Administration


text:
The director shall, in considering suspension or deletion of drugs from the list of contract drugs, ensure that the department has the ability to process drug treatment authorization requests (TARs) without substantial degradation of the level of service, including response time, to providers which was in effect July 1, 1990.

In considering suspension or deletion of drugs, the director shall seek the advice of the Chief of the Field Services Branch and the Medi-Cal Contract Drug Advisory Committee.

If the treatment authorization request reports provided in subdivision (b) of Section 14105.42 indicate a substantial degradation in the level of service, including response time, for processing TARs, the director shall, within 60 days, hold a public hearing on the functioning of the TAR system.

Subsequent to the hearing, the director shall consult with at least two members of each group represented on the Medi-Cal Contract Drug Advisory Committee as provided in subdivision (b) of Section 14105.4 and take appropriate action to remedy the problem areas discussed in the report and in the public hearing.

Based upon the information gathered as a result of the reports and public hearing referred to above, and in consultation with the Medi-Cal Contract Drug Advisory Committee, the director may add drugs which previously had been suspended or deleted to the list of contract drugs.

history: (History: Added by Stats. 1990, Ch. 457, Sec. 13. Effective July 31, 1990.)

article: 3. Administration


text:
The provisions of Sections 14105.4 to 14105.41, inclusive, and Section 14105.65 shall not preclude the department from taking emergency regulatory action as it deems appropriate.

This section shall become operative on January 1, 1997.

history: (History: Added by renumbering Section 14105.42 (as amended by Stats. 1992, Ch. 723) by Stats. 2000, Ch. 93, Sec. 83. Effective July 7, 2000.)

article: 3. Administration


text:
(a) Within 60 days of the approval of a drug in accordance with subdivision (a) of Section 14105.43, the department shall assign to that drug a reimbursement code, and provide notice to providers that the drug is on the Medi-Cal list of contract drugs.

(b) In the event that a manufacturer has not notified the department in writing of the approval of a drug by the United States Food and Drug Administration for the treatment of acquired immune deficiency syndrome (AIDS) or an AIDS-related condition within 15 days of that approval, the department shall be granted an additional 30 days to comply with subdivision (a). Written notification from the drug manufacturer shall include a copy of the United States Food and Drug Administration approval letter and the official labeling for the drug.

history: (History: Added by Stats. 1992, Ch. 949, Sec. 2. Effective January 1, 1993.)

article: 3. Administration


text:
(a) Effective July 1, 2002, all pharmaceutical manufacturers shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 and reimbursed through the Medi-Cal outpatient fee-for-service drug program. The state rebate shall be negotiated as necessary between the department and the pharmaceutical manufacturer. The negotiations shall take into account offers such as rebates, discounts, disease management programs, and other cost savings offerings and shall be retroactive to July 1, 2002.

(b) The department may use existing administrative mechanisms for any drug for which the department does not obtain a rebate pursuant to subdivision (a). The department may only use those mechanisms in the event that, by February 1, 2003, the manufacturer refuses to provide the additional rebate. This subdivision shall become inoperative on January 1, 2010.

(c) For purposes of this section, “Medi-Cal utilization data” means the data used by the department to reimburse providers under all programs that qualify for federal drug rebates pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8) or that otherwise qualify for federal funds under Title XIX of the federal Social Security Act (42 U.S.C. Sec. 1396 et seq.) pursuant to the Medicaid state plan or waivers. Medi-Cal utilization data excludes data from covered entities identified in Section 256b(a)(4) of Title 42 of the United States Code in accordance with Sections 256b(a)(5)(A) and 1396r-8(a)(5)(C) of Title 42 of the United States Code, and those capitated plans that include a prescription drug benefit in the capitated rate and that have negotiated contracts for rebates or discounts with manufacturers.

(d) Upon implementation of paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for drugs pursuant to this section, subdivisions (a) and (c) shall become inoperative and “utilization data” shall be described pursuant to subdivision (b) of Section 14105.33. The department shall post on its internet website a notice that it has implemented paragraphs (4) and (5) of subdivision (b) of Section 14105.33 for drugs pursuant to this section.

(e) Effective January 1, 2026, all pharmaceutical manufacturers renewing or entering new state rebate agreements shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, in the following amounts based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2:

(1) An amount not less than 20 percent of the average manufacturer price if the federal rebate is less than 50 percent of the average manufacturer price.

(2) An amount not less than 15 percent of the average manufacturer price if the federal rebate is 50 percent or greater of the average manufacturer price.

(f) Pharmaceutical manufacturers shall, by January 1, 2010, enter into a supplemental rebate agreement for the rebate required in subdivision (e) for drug products added to the Medi-Cal list of contract drugs on or before December 31, 2009.

(g) Effective January 1, 2010, all pharmaceutical manufacturers who have not entered into a supplemental rebate agreement pursuant to subdivisions (e) and (f) shall provide to the department a state rebate, in addition to rebates pursuant to other provisions of state or federal law, equal to an amount not less than 20 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 prior to January 1, 2010. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement by March 1, 2010, the manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i).

(h) For a drug product added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 on or after January 1, 2026, a pharmaceutical manufacturer shall provide to the department a state rebate pursuant to subdivision (e). If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 60 days after the addition of the drug to the Medi-Cal list of contract drugs, the manufacturer shall provide to the department a state rebate equal to not less than 25 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2. If the pharmaceutical manufacturer does not enter into a supplemental rebate agreement within 120 days after the addition of the drug to the Medi-Cal list of contract drugs, the pharmaceutical manufacturer’s drug product shall be made available only through an approved treatment authorization request pursuant to subdivision (i). For supplemental rebate agreements executed more than 120 days after the addition of the drug product to the Medi-Cal list of contract drugs, the state rebate shall equal an amount not less than 25 percent of the average manufacturer price based on Medi-Cal utilization data for any drug products that have been added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2.

(i) Notwithstanding any other law, drug products added to the Medi-Cal list of contract drugs pursuant to Section 14105.43 or 14133.2 of manufacturers who do not execute an agreement to pay additional rebates pursuant to this section shall be available only through an approved treatment authorization request.

(j) Changes made to the Medi-Cal list of contract drugs under this section shall be exempt from the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code), and shall not be subject to the review and approval of the Office of Administrative Law.

(k) This section shall become operative on January 1, 2026.

history: (History: Repealed (in Sec. 96) and added by Stats. 2025, Ch. 21, Sec. 97. (AB 116) Effective June 30, 2025. Operative January 1, 2026, by its own provisions.)

article: 3. Administration


text:
(a) (1) The Legislature finds and declares all of the following:

(A) The United States Department of Health and Human Services has identified the critical need for state Medicaid agencies to establish pharmacy reimbursement rates based on a pricing benchmark that reflects actual acquisition costs.

(B) The Medi-Cal program currently uses a methodology based on average wholesale price (AWP).

(C) Investigations by the federal Office of Inspector General have found that average wholesale price is inflated relative to average acquisition cost.

(2) Therefore, it is the intent of the Legislature to enact legislation by August 1, 2011, that provides for development of a new reimbursement methodology that will enable the department to achieve savings while continuing to reimburse pharmacy providers in compliance with federal law.

(b) Subject to Section 14105.45, the department may require providers, manufacturers, and wholesalers to submit any data the director determines necessary or useful in preparing for the transition from a methodology based on average wholesale price to a methodology based on actual acquisition cost.

(c) If the AWP ceases to be listed by the department’s primary price reference source vendor, the department may direct the fiscal intermediary to establish a process with the primary price reference source vendor to temporarily report the AWP consistent with the definition of AWP in Section 14105.45. If this process is established, it shall be limited in scope and duration, and shall cease when the department has fully implemented the average acquisition cost methodology pursuant to Section 14105.45.

history: (History: Amended by Stats. 2011, Ch. 29, Sec. 15. (AB 102) Effective June 29, 2011.)

article: 3. Administration


text:
(a) Pharmacy providers shall submit their usual and customary charge when billing the Medi-Cal program for prescribed drugs.

(b) “Usual and customary charge” means the lower of the following:

(1) The lowest price reimbursed to the pharmacy by other third-party payers in California, excluding Medi-Cal managed care plans and Medicare Part D prescription drug plans.

(2) The lowest price routinely offered to any segment of the general public.

(c) Donations or discounts provided to a charitable organization are not considered usual and customary charges.

(d) Pharmacy providers shall keep and maintain records of their usual and customary charges for a period of three years from the date the service was rendered.

(e) Payment to pharmacy providers shall be the lower of the pharmacy’s usual and customary charge or the reimbursement rate pursuant to subdivision (b) of Section 14105.45.

(f) 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, or make specific this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

history: (History: Amended by Stats. 2011, Ch. 29, Sec. 16. (AB 102) Effective June 29, 2011.)

article: 3. Administration


text:
(a) For purposes of this section, the following definitions shall apply:

(1) “Blood factors” has the same meaning as that term is defined in Section 14105.86.

(2) “Generically equivalent drugs” has the same meaning as that term is defined in Section 14105.45.

(3) “Legend drug” has the same meaning as that term is defined in Section 14105.45.

(4) “Medicare rate” means the rate of reimbursement established by the Centers for Medicare and Medicaid Services for the Medicare Program.

(5) “Nonlegend drug” has the same meaning as that term is defined in Section 14105.45.

(6) “Pharmacy rate of reimbursement” means the reimbursement to a Medi-Cal pharmacy provider pursuant to the provisions of paragraph (3) of subdivision (b) of Section 14105.45.

(7) “Physician-administered drug” means any legend drug, nonlegend drug, or vaccine administered or dispensed to a beneficiary by a Medi-Cal provider other than a pharmacy provider and billed to the department on a fee-for-service basis.

(8) “Volume-weighted average” means the aggregated average volume for generically equivalent drugs, weighted by each drug’s percentage of the total volume in the Medi-Cal fee-for-service program during the previous six months. For purposes of this paragraph, volume is based on the standard billing unit used for the generically equivalent drugs.

(b) The department may reimburse providers for a physician-administered drug using either a Healthcare Common Procedure Coding System code or a National Drug Code.

(c) The Healthcare Common Procedure Coding System code rate of reimbursement for a physician-administered drug shall be equal to the volume-weighted average of the pharmacy rate of reimbursement for generically equivalent drugs. The department shall publish the Healthcare Common Procedure Coding System code rates of reimbursement.

(d) The National Drug Code rate of reimbursement shall equal the pharmacy rate of reimbursement.

(e) Notwithstanding subdivisions (c) and (d), the department may reimburse providers for physician-administered drugs, with the exception of blood factors, at a rate not less than the Medicare rate.

(f) Physician-administered drugs that are blood factors shall be reimbursed pursuant to the provisions of subdivision (b) of Section 14105.86.

(g) 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 this section by means of a provider bulletin or notice, policy letter, or other similar instructions, without taking regulatory action.

(h) (1) The rates provided for in this section shall be implemented commencing January 1, 2011, but only if the director determines that the rates comply with applicable federal Medicaid requirements and that federal financial participation will be available.

(2) In assessing whether federal financial participation is available, the director shall determine whether the rates comply with the federal Medicaid requirements, including those set forth in Section 1396a(a)(30)(A) of Title 42 of the United States Code. To the extent that the director determines that a rate of reimbursement described in this section does not comply with the federal Medicaid requirements, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

(i) The director shall seek any necessary federal approval for the implementation of this section. To the extent that federal financial participation is not available with respect to a rate of reimbursement described in this section, the director retains the discretion not to implement that rate and may revise the rate as necessary to comply with the federal Medicaid requirements.

history: (History: Amended by Stats. 2017, Ch. 52, Sec. 28. (SB 97) Effective July 10, 2017.)

article: 3. Administration