Value-based Incentives In Medi-cal Managed Care - Basic Health Care - Welfare & Institutions - CA

Section § 14188

This law focuses on using Value-Based Payment (VBP) strategies to improve healthcare quality and efficiency for California's Medi-Cal program. VBPs provide financial rewards to healthcare providers for meeting specific performance and quality targets. Proposition 56 funding can support these efforts, helping Medi-Cal providers offer better care, especially for vulnerable populations. Starting July 1, 2019, VBPs were implemented with the condition of federal support and necessary approvals. Medi-Cal managed care plans are required to participate, but mental health and certain drug treatment plans are exempt. VBPs serve as additional incentives beyond standard payments to providers.

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

(1) Value-based payment (VBP) strategies offer financial incentives to health care providers that improve their performance on predetermined measures or meet specified targets that focus on quality and efficiency of care.

(2) Funding pursuant to the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, or Proposition 56, which was approved by voters at the November 8, 2016, statewide general election, is intended, in part, to supplement payments to Medi-Cal providers to ensure quality care in the Medi-Cal program.

(b) In accordance with Proposition 56 and subject to an appropriation by the Legislature, Proposition 56 funding may be used, pursuant to Section 14188.2, for directed payment programs or incentive arrangements in Medi-Cal managed care, including VBPs required of Medi-Cal managed care plans as designated by the department and as described in this article. The purpose of the VBPs shall be to help improve care for some of the most vulnerable or at-risk populations in the Medi-Cal managed care delivery system.

(c) Effective no earlier than July 1, 2019, the department shall implement the VBP programs described in Section 14188.1, only to the extent that federal financial participation is available and that any necessary federal approvals have been obtained. The department shall develop the structure and parameters of the VBP programs, including designation of those Medi-Cal managed care plans that are required to participate in VBP programs. The department may modify the VBP programs to the extent it deems necessary to obtain or maintain federal approval, if needed to target spending in a manner that furthers the purpose of the programs, or based on evaluation of the programs.

(d)

(1) The department shall require the designated Medi-Cal managed care plans to make VBPs to network providers that meet the requirements of the VBP programs implemented pursuant to Section 14188.1, in the amounts, form, and manner as directed by the department.

(2) The department shall not require a county mental health plan contracted with the department pursuant to Chapter 8.9 (commencing with Section 14700), or a county Drug Medi-Cal organized delivery system authorized in the California Medi-Cal 2020 Demonstration pursuant to Article 5.5 (commencing with Section 14184) or a successor demonstration or waiver as applicable, to participate in any VBP program described in Section 14188.1.

(3) VBPs made pursuant to this article shall be in addition to any other payments made by the designated Medi-Cal managed care plans to applicable network providers for services or other performance-based incentives.

(e) For purposes of this article, “VBP” means value-based payment.

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Section § 14188.1

This law mandates the creation of Value-Based Payment (VBP) programs to enhance care within Medi-Cal managed care. These programs offer incentive payments to healthcare providers for meeting specific care milestones and performance measures. There are four main VBP programs: improving behavioral health integration, prenatal and postpartum care, chronic disease management, and children's health care quality and outcomes.

In the behavioral health program, providers can earn incentives by employing a team-based care approach for serious mental or chronic health conditions. Incentives vary based on the level of integration achieved.

The prenatal and postpartum program rewards providers for excelling in prenatal and postpartum care measures. Maximum incentives go to those meeting high standards, with partial incentives for meeting minimum requirements.

The chronic disease management program focuses on conditions like diabetes and hypertension, awarding providers for high achievement on selected care measures.

The children's health care program incentivizes providers to improve childhood health care quality using recognized standards like HEDIS.

Subject to Section 14188, the department shall develop all of the following VBP programs:

(a) A VBP program that is aimed at improving behavioral health integration in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans may earn incentive payments for achieving milestones and measures through partnerships with qualified network providers that adopt a team-based care approach for individuals with serious mental health conditions or other chronic health conditions.

(2) Different levels of incentive payments may be available depending on the level of integration, using either a coordination or collocation approach. Partial incentive payments may be available for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(b) A VBP program that is aimed at improving prenatal and postpartum care in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network primary care or appropriate specialist providers that meet achievement levels on selected prenatal and postpartum care measures, as determined by the department.

(2) Qualified network primary care or appropriate specialist providers may be eligible for maximum incentive payments if they meet the designated high-performance standards, and partial incentive payments for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network providers that meet achievement levels on selected chronic disease care measures, as determined by the department. The measures shall be in chronic disease care areas, including, but not limited to, diabetes care and control of hypertension, using measures currently recognized for those areas in the Healthcare Effectiveness Data and Information Set (HEDIS) or other nationally recognized measures that the department deems appropriate.

(2) Qualified network providers may be eligible for maximum incentive payments if they meet the designated high-performance standards, and partial incentive payments for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(d) A VBP program that is aimed at improving quality and outcomes for children in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network providers that meet achievement levels on selected childhood health care quality measures, as determined by the department. The measures shall be developed using measures currently recognized for those areas in HEDIS or other nationally recognized measures that the department deems appropriate.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

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Section § 14188.2

This law outlines how Value-Based Payment (VBP) programs, detailed in a different section, will be funded. The money comes from a special fund tied to the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, which collects tobacco taxes. The funding is specifically allocated by the state legislature through the Budget Act each fiscal year. Furthermore, the law stresses that these expenditures must comply with certain criteria and conditions, ensuring they align with the purposes outlined in the Tobacco Tax Act.

(a) The VBP programs described in Section 14188.1 shall be funded using moneys appropriated to the department for purposes of those programs in the Budget Act of 2019, or a Budget Act in a subsequent fiscal year, from the Healthcare Treatment Fund established pursuant to subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

(b) The Legislature finds and declares that the expenditures authorized by this article are all of the following:

(1) Made in accordance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Article 2.5 (commencing with Section 30130.50) of Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code).

(2) Based on criteria developed and periodically updated as part of the annual state budget process, in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

(3) Consistent with the purposes and conditions of expenditures described in subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

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Section § 14188.3

This section allows a department in California to enter into contracts in order to implement certain programs. These contracts can be exclusive or nonexclusive and can be made through bids or negotiation. Importantly, these contracts do not have to follow some usual state regulations and review processes. Additionally, the department is allowed to issue plan letters or instructions to guide the implementation of these programs without going through the normal regulatory procedures.

(a) To implement this article, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision 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, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and shall be exempt from the review or approval of any division of the Department of General Services.

(b) 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 article, in whole or in part, by means of plan letters or other similar instructions, without taking regulatory action.

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Section § 14188.4

This law outlines how payments for services related to Section 14188.1 can only be implemented if the California Legislature has allocated funds for them in the state's budget for that fiscal year. It also states that the implementation of these payments requires necessary federal approvals and must not risk losing federal financial support. Additionally, this law overrides any other law that might suspend this kind of payment program, including provisions from the Budget Acts of 2019 and 2020. Finally, the law confirms compliance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, ensuring that it follows criteria and conditions set by this act, which are updated during the state's annual budget process.

(a) Notwithstanding any other law, the department shall only implement the payments described under Section 14188.1 for a service period during a state fiscal year subject to appropriation by the Legislature for that state fiscal year.

(b) This section shall be implemented only to the extent that the department obtains any necessary federal approvals and determines that federal financial participation is not otherwise jeopardized.

(c) Notwithstanding any other law, this section shall supersede any law suspending authority for any program described in Section 14188.1. The law on suspending authority includes, but is not limited to, provisions under the Budget Act of 2019, the Budget Act of 2020, and enacted legislation providing for appropriations related to those acts.

(d) The Legislature finds and declares that this section complies with all of the following:

(2) Based on criteria developed and periodically updated as part of the annual state budget process, in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

(3) Consistent with the purposes and conditions of expenditures described in subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

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