BILL NUMBER: SB 147	CHAPTERED
	BILL TEXT

	CHAPTER  760
	FILED WITH SECRETARY OF STATE  OCTOBER 10, 2015
	APPROVED BY GOVERNOR  OCTOBER 10, 2015
	PASSED THE SENATE  SEPTEMBER 10, 2015
	PASSED THE ASSEMBLY  SEPTEMBER 2, 2015
	AMENDED IN ASSEMBLY  AUGUST 31, 2015
	AMENDED IN ASSEMBLY  AUGUST 17, 2015
	AMENDED IN ASSEMBLY  JULY 8, 2015
	AMENDED IN SENATE  APRIL 21, 2015
	AMENDED IN SENATE  APRIL 7, 2015

INTRODUCED BY   Senator Hernandez

                        JANUARY 28, 2015

   An act to add Article 4.1 (commencing with Section 14138.1) to
Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, relating to Medi-Cal.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 147, Hernandez. Federally qualified health centers.
   Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions. Existing law provides that federally
qualified health center (FQHC) services, as described, are covered
benefits under the Medi-Cal program, to be reimbursed, to the extent
that federal financial participation is obtained, to providers on a
per-visit basis. "Visit" is defined as a face-to-face encounter
between a patient of an FQHC and specified health care professionals.
Existing federal law authorizes a state plan to provide for payment
in any fiscal year to an FQHC for specified services in an amount
that is determined under an alternative payment methodology (APM) if
it is agreed to by the state and the FQHC and results in a payment to
the FQHC of an amount that is at least equal to the amount otherwise
required to be paid to the FQHC.
   This bill would require the department to authorize an APM pilot
project, to commence no sooner than July 1, 2016, for FQHCs that
agree to participate. The bill would require the department to
authorize implementation of an APM pilot project with respect to a
county for a period of up to 3 years. The bill would require the
department to determine an APM supplemental capitation amount for
each APM aid category to be paid by the department to each principal
health plan that contains at least one participating FQHC in its
provider network, as specified. The bill would require, except as
specified, the department to contract with an independent entity to
perform an evaluation of the APM pilot project, and would require
that the evaluation be completed and provided to the Legislature, to
the extent practicable, within 6 months of the conclusion of the APM
pilot project in certain counties, as specified.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 4.1 (commencing with Section 14138.1) is added
to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions
Code, to read:

      Article 4.1.  Payment Reform Pilot Program for Federally
Qualified Health Centers


   14138.1.  For purposes of this article, the following definitions
apply:
   (a) "Alternative payment methodology" (APM) has the same meaning
as specified in Section 1396a(bb)(6) of Title 42 of the United States
Code.
   (b) "APM aid category" means a Medi-Cal category of aid designated
by the department. For all its APM enrollees in an APM aid category,
a participating FQHC site shall receive compensation as described
under the APM pilot project. The APM aid categories may include, but
are not limited to, all of the following categories of aid:
   (1) Adults.
   (2) Children.
   (3) Seniors and persons with disabilities.
   (4) The adult expansion population eligible pursuant to Section
14005.60, to the extent the department determines, in consultation
with health plans and interested FQHCs, that sufficient data is
available to allow for inclusion of this population in the APM pilot
project. This paragraph shall not be construed to prohibit inclusion
of the adult expansion population in the APM pilot project on a date
subsequent to initial authorization pursuant to subdivision (a) of
Section 14138.12.
   (c) "APM enrollee" means a member who is assigned by a principal
health plan or subcontracting payer to a participating FQHC for
primary care services and who is within one of the designated APM aid
categories.
   (d) "APM pilot project" means the pilot project authorized by this
article.
   (e) "APM scope of services" means the scope of services for a
participating FQHC for which its per-visit rate was determined
pursuant to Section 14132.100, but only to the extent those services
are covered pursuant to the contract between the department and the
applicable principal health plan.
   (f) "APM supplemental capitation" means an additional, APM aid
category-specific, PMPM amount that is paid by the department to a
principal health plan having one or more participating FQHCs in its
provider network.
   (g) "Clinic-specific PMPM" means the monthly, per assigned member,
capitated amount the principal health plan or subcontracting payer
is required to pay to the participating FQHC for the APM scope of
services. The clinic-specific PMPM is exclusive of any incentive
payments and shall be developed to reflect the amount the
participating FQHC would have received under the prospective payment
system methodology set forth in Section 14132.100.
   (h) "FQHC" means any community or public "federally qualified
health center," as defined in Section 1396d(l)(2)(B) of Title 42 of
the United States Code and providing services as defined in Section
1396d(a)(2)(C) of Title 42 of the United States Code.
   (i) "Member" means a Medi-Cal beneficiary who is enrolled with a
principal health plan or subcontracting payer.
   (j) "Participating FQHC" means an FQHC participating in the APM
pilot project at one or more of the FQHC's sites. "Participating FQHC"
also refers to an FQHC's site that is participating in the APM pilot
project.
   (k) "PMPM" and "per member per month" both mean a monthly payment
made for providing or arranging health care services for a member and
may refer to a payment by the department to a principal health plan,
or by a principal health plan to a subcontracting payer, or by a
principal health plan or subcontracting payer to an FQHC, or from and
to other entities as specified in this article.
   (l) "Principal health plan" means an organization or entity that
enters into a contract with the department pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing with
Section 14087.5), Article 2.81 (commencing with Section 14087.96),
Article 2.82 (commencing with Section 14087.98), Article 2.91
(commencing with Section 14089), or Chapter 8 (commencing with
Section 14200), to provide or arrange for the care of Medi-Cal
beneficiaries within a county in which the APM pilot project is
implemented.
   (m) "Subcontracting payer" means an organization or entity that
subcontracts with a principal health plan to provide or arrange for
the care of its members and contains one or more participating FQHCs
in its provider network.
   (n) "Traditional encounter" means a face-to-face encounter that is
recognized as a billable visit, as described in subdivision (g) of
Section 14132.100.
   (o) "Traditional wrap-around payment" means the supplemental
payments payable to an FQHC in the absence of the APM pilot project
with respect to services provided to Medi-Cal managed care enrollees,
which are made by the department pursuant to subdivision (e) of
Section 14087.325 and subdivision (h) of Section 14132.100.
   14138.10.  The Legislature finds and declares all of the
following:
   (a) The federal Patient Protection and Affordable Care Act has
made and continues to make significant progress in driving health
care delivery system reforms that emphasize health outcomes,
efficiency, patient satisfaction, and value.
   (b) California has expanded Medi-Cal to cover more than 12 million
residents, roughly one-third of the state's population. To meet the
needs of the state's growing patient population, California must
continue to explore new strategies to expand access to high quality
and cost-effective primary care services.
   (c) With such a large portion of the state's population receiving
health care services through Medi-Cal, it is imperative that
patient-centered innovations drive Medi-Cal reforms.
   (d) Health care today is more than a face-to-face visit with a
provider, but rather a whole-person approach, often including a
physician, a care team of other health care providers, technology
inside and outside of a health center, and wellness activities
including nutrition and exercise classes, all of which are designed
to be more easily incorporated into a patient's daily life.
   (e) Accessible health care in a manner that fits a patient's needs
is important for improving patient satisfaction, building trust, and
ultimately improving health outcomes.
   (f) In an attempt to invest up front in health care services that
can prevent longer term avoidable high-cost services, the federal
Patient Protection and Affordable Care Act made a significant
investment in FQHCs.
   (g) FQHCs are essential community providers, providing high
quality, cost-effective comprehensive primary care services to
underserved communities.
   (h) Today FQHCs face certain restrictions because the current
payment structure reimburses an FQHC only when there is a traditional
encounter with a provider. Current law prohibits payment for both a
primary care visit and mental health visit on the same day.
   (i) A more practical approach financially incentivizes FQHCs to
provide the right care at the right time. Restructuring the current
visit based, fee-for-service model with a capitated equivalent
affords FQHCs the assurance of payment and the flexibility to deliver
care in the most appropriate patient-centered manner.
   (j) A reformed payment methodology will enable FQHCs to take
advantage of alternative encounters. Alternative encounters, such as
group visits, same-day mental health services, and telephone and
email consultations, are effective care delivery methods and
contribute to a patient's overall health and well-being.
   14138.11.  It is the intent of the Legislature to test an
alternative payment methodology for FQHCs, as permitted by federal
law, and to design and implement the APM to do all of the following:
   (a) Provide patient-centered care delivery options to California's
expansive Medi-Cal population.
   (b) Promote cost efficiencies, and improve population health and
patient satisfaction.
   (c) Improve the capacity of FQHCs to deliver high-quality care to
a population growing in numbers and in complexity of needs.
   (d) Transition away from a payment system that rewards volume with
a flexible alternative that recognizes the value added when Medi-Cal
beneficiaries are able to more easily access the care they need and
when providers are able to deliver care in the most appropriate
manner to patients.
   (e) Track alternative encounters at FQHCs in order to establish a
data set from which alternative encounters may be assigned a value
that can be used in future ratesetting.
   (f) Implement the APM where the FQHC receives at least the same
amount of funding it would receive under the current payment system,
and in a manner that does not disrupt patient care or threaten FQHC
viability.
   14138.12.  (a) (1) The department shall authorize a payment reform
pilot project for FQHCs using an APM in accordance with this
article.
   (2) Implementation of the APM pilot project shall begin no sooner
than July 1, 2016, subject to any necessary federal approvals.
   (3) The department shall authorize implementation of an APM pilot
project with respect to a county for a period of up to three years.
   (4) At least 90 days prior to implementation of an APM pilot
project for a participating FQHC site in a county, the department
shall notify a principal health plan in writing of the principal
health plan's specific APM supplemental capitation rate for the
participating FQHC in the county. The notification from the
department to the principal health plan shall be based on the rates
submitted by the department for federal approval. If the APM
supplemental capitation rates are modified after the notification to
a principal health plan, the department shall notify a principal
health plan of the revised rates and, if the principal health plan
requests, adjust the implementation date of the APM pilot project for
a participating FQHC in a county so that it occurs at least 90 days
after the revised rate notification.
   (5) At least 90 days prior to implementation of an APM pilot
project for a participating FQHC site in a county, the department
shall notify a principal health plan and the FQHC site in writing of
the clinic-specific PMPM rate for the participating FQHC site in the
county.
   (6) The APM pilot project for a participating FQHC site in a
county shall begin no sooner than the first day of the month
following the month in which the department received federal approval
of the principal health plan's specific APM supplemental capitation
rates.
   (b) The APM pilot project shall comply with federal APM
requirements and the department shall file a state plan amendment and
seek any federal approvals as necessary for the implementation of
this article. Nothing in this article shall be construed to authorize
the department to seek federal approval to affirmatively waive
Section 1396a(bb)(6) of Title 42 of the United States Code.
   (c) Nothing in this article shall be construed to limit or
eliminate services provided by FQHCs as covered benefits in the
Medi-Cal program.
   14138.13.  (a) The department shall notify every FQHC in the state
of the APM pilot project and shall invite any interested FQHC to
apply for participation in the APM with respect to one or more of the
FQHC's sites. Consistent with federal law, the state plan amendment
described in subdivision (b) of Section 14138.12 shall specify that
the department and each participating FQHC voluntarily agrees to the
APM.
   (b) (1) The department shall develop, in consultation with
interested FQHCs and principal health plans and consistent with
federal law, the eligibility criteria to be used in evaluating
applications from interested FQHCs for participation in the pilot
project, which shall include, but need not be limited to, the
following:
   (A) The FQHC has the demonstrated ability to collect and submit
encounter data in a form and manner that satisfies department
requirements.
   (B) The FQHC is in good standing with the relevant state and
federal regulators.
   (C) The FQHC has the financial and administrative capacity to
undertake payment reform.
   (2) In addition to the criteria listed in paragraph (1), the
department may take into consideration the number of APM enrollees
assigned by a plan at each FQHC site as an eligibility requirement
for FQHC participation.
   (3) In accordance with the process and criteria developed pursuant
to paragraphs (1) and (2), the department shall approve or deny an
interested FQHC site application for participation in the pilot
project. The department may limit the number of participating FQHCs
in the pilot project and the number of counties in which the pilot
project will operate.
   (4) All principal health plans and applicable subcontracting
payers are required to participate in the APM pilot project pursuant
to this article to the extent that one or more contracted FQHC sites
located in the plan's county are selected to participate in the pilot
project.
   (c) The APM shall be applied only with respect to a participating
FQHC for services the FQHC provides to its APM enrollees that are
within its APM scope of services.
   (d) Payment to the participating FQHC shall continue to be
governed by the provisions of Sections 14087.325 and 14132.100 for
services provided with respect to both of the following categories of
patients:
   (1) A Medi-Cal beneficiary who receives services from any FQHC to
which the beneficiary is not assigned for primary care services under
the APM pilot project by a principal health plan or subcontracting
payer.
   (2) A person who is a Medi-Cal beneficiary, but who is not a
Medi-Cal beneficiary within a designated APM aid category.
   (e) A participating FQHC, with respect to one or more sites of its
choosing, may opt to discontinue its participation in the pilot
project subject to a notice requirement of no less than 120 days.
   14138.14.  (a) A participating FQHC shall be compensated for the
APM scope of services provided to its APM enrollees pursuant to this
section.
   (b) A participating FQHC shall receive from the principal health
plan or applicable subcontracting payer reimbursement for each APM
enrollee in the form of a clinic-specific PMPM for the applicable APM
aid category. The department shall determine the clinic-specific
PMPM for each APM aid category taking into account all the following
factors:
   (1) Historical utilization of FQHC services by assigned members in
each APM aid category.
   (2) The participating FQHC's prospective payment system rate and
applicable adjustments relevant for the fiscal year, such as annual
rate adjustments.
   (3) Other trend and utilization adjustments as appropriate in
order to reflect the level of reimbursement that would have been
received by the participating FQHCs in the absence of the APM pilot
project.
   (c) A participating FQHC and applicable principal health plan or
subcontracting payer may enter into arrangements in which the
clinic-specific PMPM amount required in subdivision (b) is paid in
more than one capitated increment, as long as the total capitation
each month received by the participating FQHC is equivalent to the
clinic-specific PMPM.
   (d) In cases where a subcontracting payer is involved, the
principal health plan shall demonstrate and certify to the department
that it has contracts or other arrangements in place that provide
for meeting the requirements in subdivision (b) and to the extent
that the subcontracting payer fails to comply with the applicable
requirements in this article, the principal health plan shall then be
responsible to ensure the participating FQHC receives all payments
due under this article in a timely manner.
   (e) The department shall adjust the amounts in subdivision (b) as
necessary to account for any change to the prospective payment system
rate for participating FQHCs, including changes resulting from a
change in the Medicare Economic Index pursuant to subdivision (d) of
Section 14132.100, and any changes in the FQHC's scope of services
pursuant to subdivision (e) of Section 14132.100.
   (f) An FQHC site participating in the APM pilot project shall not
receive traditional wrap-around payments pursuant to Sections
14132.100 and 14087.325 for visits within the APM scope of services
it provides to its APM enrollees.
   14138.15.  (a) A principal health plan shall be compensated by the
department for the services provided to its APM enrollees pursuant
to this section.
   (b) For each principal health plan that contains at least one
participating FQHC in its provider network, the department shall
determine an APM supplemental capitation amount for each APM aid
category to be paid by the department to the principal health plan,
which shall be expressed as a PMPM amount. This supplemental
capitation amount will be in addition to the funding for the APM
scope of services already contained in the principal health plan's
capitated rates paid by the department and shall be actuarially
sound. The department shall determine the APM supplemental capitation
amount for each APM aid category, taking into account all of the
following factors:
   (1) The clinic-specific PMPM amounts for each APM aid category for
each participating FQHC in the plan's network.
   (2) The funding for the APM scope of services already contained in
the principal health plan's capitated rates.
   (3) The historical wrap-around payments paid by the department for
participating FQHCs for assigned members in each APM aid category.
   (4) As applicable, the likely distribution of members among
multiple participating FQHCs.
   (c) The principal health plan shall report to the department, in a
form to be determined by the department in consultation with the
principal health plan, the number of APM enrollees for each APM aid
category in the plan each month.
   (d) The department shall pay each principal health plan its
applicable APM supplemental capitation amount for the number of APM
enrollees for each APM aid category reported by the principal health
plan pursuant to subdivision (c).
   (e) The department, in consultation with the principal health
plans, shall develop methods to verify the information reported
pursuant to subdivision (c), and may adjust the payments made
pursuant to subdivision (d) as appropriate to reflect the verified
number of APM enrollees for each APM aid category.
   (f) The department shall adjust the amounts in subdivision (b) as
necessary to account for any change to the prospective payment system
rate for participating FQHCs, including changes resulting from a
change in the Medicare Economic Index pursuant to subdivision (d) of
Section 14132.100, and any changes in the FQHC's scope of services
pursuant to subdivision (e) of Section 14132.100.
   14138.16.  (a) For the duration of the APM pilot project, the
department shall establish a risk corridor structure for the
principal health plans relating only to the APM supplemental
capitation payments pursuant to Section 14138.15, to the extent
consistent with principles of actuarial soundness.
   (b) The risk sharing of the costs under this section shall be
constructed by the department so that it is symmetrical with respect
to risk and profit, and so that all of the following apply:
   (1) The principal health plan is fully responsible for all costs
up to one-half of 1 percent in excess of the APM supplemental
capitation amounts.
   (2) The principal health plan shall fully retain the revenues paid
through the APM supplemental capitation amounts in excess of the
costs incurred up to one-half of 1 percent below the APM supplemental
capitation amounts.
   (3) The principal health plan and the department shall share
equally in the responsibility for costs in excess of the APM
supplemental capitation amounts that are greater than one-half of 1
percent but less than 1 percent above the APM supplemental capitation
amounts.
   (4) The principal health plan and the department shall share
equally the benefit of the revenues paid through the APM supplemental
capitation amounts in excess of the costs incurred that are greater
than one-half of 1 percent but less than 1 percent below the APM
supplemental capitation amounts.
   (5) The department shall be fully responsible for all costs in
excess of the APM supplemental capitation amounts that are more than
1 percent above the APM supplemental capitation amounts.
   (6) The department shall fully retain the revenues paid through
the APM supplemental capitation amounts in excess of the costs
incurred greater than 1 percent below the supplemental capitation
amounts.
   (c) The department shall develop specific contract language to
implement the requirements of this section that shall be incorporated
into the contracts of each affected principal health plan.
   (d) This section shall be implemented only to the extent that any
necessary federal approvals or waivers are obtained.
   14138.17.  (a) In order to ensure participating FQHCs have an
incentive to manage visits and costs, while at the same time
exercising a reasonable amount of flexibility to deliver care in the
most efficient and quality driven manner, for the duration of the APM
pilot project the department shall, in accordance with this
subdivision, establish a payment adjustment structure. The payment
adjustment structure shall be developed with stakeholder input and
shall meet the requirements of Section 1396a(bb)(6) of Title 42 of
the United States Code.
   (b) The payment adjustment structure shall be applicable on a
site-specific basis.
   (c) The payment adjustment structure shall permit an aggregate
adjustment to the payments received when actual utilization of
services for a participating FQHC's site exceeds or falls below
expectations that were reflected within the calculation of the rates
developed pursuant to Sections 14138.14 and 14138.15. For purposes of
this payment adjustment structure, both actual and expected
utilization shall be expressed as the total number of traditional
encounters that would be recognized pursuant to subdivision (g) of
Section 14132.100 for the APM enrollees of the participating FQHC's
site across all APM aid categories and averaged on a per member per
year basis.
   (d) An adjustment pursuant to this section shall occur no more
than once per year per participating FQHC's site during the APM pilot
project and shall be subject to approval by the department.
   (1) An adjustment to payments in the case of higher than expected
utilization shall be triggered when utilization exceeds projections
by more than 5 percent for the first year, 71/2 percent for the
second year, and 10 percent for the third year. If the trigger level
is reached in a given year, the participating FQHC site shall receive
an aggregate payment adjustment from the principal health plan or
applicable subcontracting payer that is based upon the difference
between its actual utilization for the year and 105 percent of
projected utilization for the first year, the difference between
actual utilization and 1071/2 percent of projected utilization for
the second year, and the difference between actual utilization and
110 percent of projected utilization for the third year. The payment
adjustment in each instance shall be calculated as follows:
   (A) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.
   (B) The projected total utilization contained in the
clinic-specific PMPMs for the actual APM enrollees for the applicable
year shall be determined.
   (C) The amount in subparagraph (B) shall be adjusted to reflect
the applicable comparison utilization for the year as follows:
   (i) Multiplied by 1.05 for year one.
   (ii) Multiplied by 1.075 for year two.
   (iii) Multiplied by 1.1 for year three.
   (D) The amount in subparagraph (C) shall be subtracted from the
amount in subparagraph (A).
   (E) The amount in subparagraph (D) shall be multiplied by the
per-visit rate that was determined pursuant to Section 14132.100 for
the participating FQHC site yielding the payment adjustment for the
participating FQHC site. The payment adjustment shall be paid to the
participating FQHC site by the principal health plan, or
subcontracting payer, as applicable, in one aggregate payment.
   (2) (A) To incentivize care delivery in ways that may vary from
traditional delivery of care, participating FQHCs shall have the
flexibility to experience a lower than expected visit utilization of
up to 30 percent of projected utilization. If an FQHC site's actual
utilization is at a level that is more than 30 percent lower than the
projected utilization, the department shall review, in consultation
with the principal health plan, or subcontracting payer, as
applicable, the FQHC site's relevant data to identify the cause or
causes of the difference, including, but not limited to, its volume
of alternative encounters. If the department is able to determine
that all or part of the lower than expected utilization was due to
objective factors developed by the department in consultation with
the principal health plans and FQHCs that are related to delivery
system transformation and enhancements, such as alternative
encounters, the department shall allow the participating FQHC site to
retain all or a portion of the payments attributable to the
utilization decrease that exceeds 30 percent lower than the projected
utilization. If the department is unable to determine that all or a
portion of the utilization decrease in excess of 30 percent was
related to delivery system transformation and enhancements according
to the objective criteria developed pursuant to this subparagraph,
the participating FQHC site shall be required to refund the
applicable payment amount to the principal health plan or
subcontracting payer pursuant to subparagraph (B).
   (B) The total amount refunded by the participating FQHC site to
the principal health plan or subcontracting payer shall be limited to
an amount calculated as follows:
   (i) The actual total utilization, expressed as traditional
encounters, for the applicable year shall be determined.
   (ii) The projected total utilization contained in the
clinic-specific PMPMs for the actual APM enrollees for the applicable
year shall be determined and multiplied by 70 percent.
   (iii) The amount in clause (i) shall be subtracted from the amount
in clause (ii).
   (iv) The amount in clause (iii) shall be multiplied by the
participating FQHC site's per-visit rate that was determined pursuant
to Section 14132.100, yielding the maximum amount of the refund to
be made by the participating FQHC site. The refund shall be paid in
one aggregate payment.
   (C) Any adjustment made pursuant to this paragraph shall be
requested by a principal health plan, subcontracting payer, or FQHC,
no later than 90 days after that determination by the department
pursuant to
subparagraph (A).
   14138.18.  (a) The department, in consultation with interested
FQHCs and principal health plans, may modify any methodology,
process, or provision specified in this article to the extent
necessary to comply with federal law or to obtain any necessary
federal approvals.
   (b) This article shall be implemented only to the extent that
federal financial participation is available and any necessary
federal approvals have been obtained.
   (c) In the event of a conflict between a provision in this article
and the terms of a federally approved APM, the terms of the
federally approved APM shall control.
   14138.19.  In the event of an epidemic, or similar catastrophic
occurrence that the department determines is likely to result in at
least a 30 percent increase in actual utilization per member per
month within the APM scope of services for one or more APM aid
categories at a participating FQHC site, the department may adjust,
or require the adjustment of, payments made pursuant to this article
as it deems necessary to account for the utilization increase at the
affected participating FQHC site. The department shall make the
determination described in this section upon written request of a
participating FQHC site.
   14138.21.  Nothing in this article shall be deemed to affect the
amounts paid or the reimbursement methodology applicable to FQHCs for
dental services that are provided outside the scope of a contract
between the department and an applicable principal health plan that
is in effect as of July 1, 2015.
   (a) The department shall contract with an independent entity to
perform an evaluation of the APM pilot project authorized pursuant to
this article. To the extent practicable, the evaluation shall be
completed and provided to the appropriate fiscal and policy
committees of the Legislature within six months of the conclusion of
the pilot project in those counties that are included in the initial
pilot project implementation authorized pursuant to paragraph (2) of
subdivision (a) of Section 14138.12. The department shall carry out
the duty imposed pursuant to this subdivision only if there are
sufficient private foundation or nonprofit foundation funds available
for this purpose. A report submitted pursuant to this subdivision
shall be submitted in compliance with Section 9795 of the Government
Code.
   (b) The evaluation by the independent entity shall assess and
report on whether the APM pilot project produced improvements in
access to primary care services, care quality, patient experience,
and overall health outcomes for APM enrollees. The evaluation shall
include existing FQHC required quality metrics and an assessment of
how the changes in financing allowed for alternative types of primary
care visits and alternative encounters between the participating
FQHC and the patient and how those changes affected volume of
same-day visits for mental and physical health conditions. The
evaluation shall also assess whether the APM pilot project's efforts
to improve primary care resulted in changes to patient service
utilization patterns, including the reduced utilization of avoidable
high-cost services and services provided outside the FQHC. The
evaluation shall also identify any administrative and financial
implementation issues for FQHCs that may arise if subsequent
legislation makes the pilot program operative statewide.
   14138.22.  (a) 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 by means of all-county letters, plan letters, plan or
provider bulletins, or similar instructions, without taking
regulatory action.
   (b) Beginning January 1, 2017, and notwithstanding Section 10231.5
of the Government Code, the department shall provide a status report
to the Legislature regarding any instruction issued by the
department pursuant to subdivision (a) on a semiannual basis until
six months after implementation of the pilot project authorized
pursuant to this article.
   (c) It is the intent of the Legislature, if the scope of the pilot
project authorized by this article is extended, that the department
adopt regulations to implement this article.
   14138.23.  For purposes of implementing this article, the
department may enter into exclusive or nonexclusive contracts on a
bid or negotiated basis, including contracts for the purpose of
obtaining subject matter expertise or other technical assistance. Any
contract entered into or amended pursuant to this section shall be
exempt from Part 2 (commencing with Section 10100) of Division 2 of
the Public Contract Code and Chapter 6 (commencing with Section
14825) of Part 5.5 of Division 3 of the Government Code, and shall be
exempt from the review or approval of any division of the Department
of General Services.