California Code of Regulations
Title 9 - Rehabilitative and Developmental Services
Division 1 - Department of Mental Health
Chapter 11 - Medi-Cal Specialty Mental Health Services
Subchapter 1 - General Provisions
Article 4 - Standards
Section 1810.438 - Alternative Contracts and Payment Arrangements Between MHPs and Providers

Universal Citation: 9 CA Code of Regs 1810.438

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Except as provided in Subsection (d), the MHP shall request approval from the Department to establish a contract with a provider for specialty mental health services where that provider is held financially responsible for specialty mental health services provided to beneficiaries by one or more other providers or to establish a payment arrangement with contract or non-contract providers that would not be allowed under this Chapter absent approval under this Section.

(b) The MHP may request approval from the Department under this Section by submitting a written request to the Department containing a description of:

(1) The proposed contract terms concerning reimbursement or the proposed payment arrangement. For providers that will conduct utilization management activities, the MHP must ensure that the compensation arrangements in the contract are not structured so as to provide incentives for the provider to deny, limit, or discontinue medically necessary services to any beneficiary.

(2) A complete description of the administrative system of the provider and the MHP that will ensure proper payment to the provider, claiming of the FFP available for services provided to Medi-Cal beneficiaries under the Medi-Cal program, and MHP and provider cost reporting. If the contract is in excess of $10,000 and utilizes State funds, a provision that: "The contracting parties shall be subject to the examination and audit of the Auditor General for a period of three years after final payment under contract (Government Code section 8546.7)." The MHP shall also be subject to the examination and audit of the State Auditor General for a period of three years after final payment under contract (Government Code section 8546.7).

(c) The MHP shall not implement the proposed contract terms or payment arrangement until written approval by the Department is received. The Department shall review the proposal and approve the request only if the following conditions are met:

(1) The proposed contract or payment arrangement complies with federal and state requirements for reimbursement for specialty mental health services.

(2) The MHP has established appropriate systems to prevent duplicate claiming of FFP.

(3) The MHP has established appropriate procedures to assure that services provided under the contract or payment arrangement are reported by only one provider in cost and data reporting to the Department.

(d) Written policies that address beneficiary's rights as required by title 42 CFR section 438.100 shall be included in the contracts.

(e) Contracts between the MHP and a Fee-for-Service/Medi-Cal hospital that include psychiatric inpatient hospital professional services pursuant to Section 5781 of the Welfare and Institutions Code shall not require approval from the Department.

(f) Nothing in this Section shall exclude or exempt a provider from compliance with licensing requirements for health care service plans and specialized health care service plans under Section 1340 et seq. of the Health and Safety Code.

(g) A negotiated case rate or capitation rate of payment between an MHP and a provider pursuant to this Section shall not be the basis for finding a violation of the requirements of Title 22, Sections 51501(a) or 51480 and shall not be the basis for otherwise reducing the provider's reimbursement pursuant to Title 22, Division 3, Subdivision 1, Chapter 3, Article 7. A case rate is a payment method that reimburses the provider a set rate per time period per patient who receives at least one service during the time period, regardless of the actual number of services provided. A capitation rate is a payment method that reimburses the provider a set rate per time period, usually per month, per identified patient for all services needed by the patient, whether or not any services are received.

(h) The MHP shall obtain approval from the Department prior to implementing a Physician Incentive Plan as described at title 42 CFR section 438.6(h). The Department shall approve the MHP's request only if the proposed Physician Incentive Plan complies with all applicable federal and State regulations.

1. New section filed 10-31-97 as an emergency; operative 11-1-97 (Register 97, No. 44). A Certificate of Compliance must be transmitted to OAL by 3-2-98 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 3-2-98 as an emergency; operative 3-2-98 (Register 98, No. 10). A Certificate of Compliance must be transmitted to OAL by 6-30-98 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 6-17-98 as an emergency; operative 6-30-98 (Register 98, No. 25). Pursuant to Chapter 324 (Statutes of 1998) Item 4440-103-0001(4), a Certificate of Compliance must be transmitted to OAL by 7-1-99 or emergency language will be repealed by operation of law on the following day.
4. Editorial correction of HISTORY 3 (Register 98, No. 39).
5. Editorial correction extending Certificate of Compliance date to 7-1-2001 pursuant to Chapter 50 (Statutes of 1999) Item 4440-103-0001(4) (Register 99, No. 33). Notwithstanding any other provision of law, emergency regulations adopted pursuant to Welfare and Institutions Code section 14680 to implement the second phase of mental health managed care as provided in this part shall remain in effect until permanent regulations are adopted, or June 30, 2006, whichever occurs first.
6. Editorial correction of HISTORY 5 (Register 2000, No. 42).
7. Editorial correction of HISTORY 5 and repealer and new section filed 5-19-2006; operative 6-18-2006 (Register 2006, No. 20).
8. Amendment of subsections (b)(1)-(2), new subsections (d) and (h), subsection relettering and amendment of NOTE filed 10-18-2010; operative 11-17-2010 (Register 2010, No. 43).

Note: Authority cited: Section 14680, Welfare and Institutions Code. Reference: Section 8546.7, Government Code; Section 1340 et seq., Health and Safety Code; Sections 5777, 5778, 5781 and 14684, Welfare and Institutions Code; and 42 Code of Federal Regulations, Sections 438.6(h) and 438.100.

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