Official Summary Text
AB 1113, as amended, Mark González.
Federally qualified health centers: mission spend ratio.
Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.
This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this purpose, with a goal of implementation of the latter methodology by January 1,
2027.
2028.
By June 30,
2026,
2027,
and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, one of certain Internal Revenue Service (IRS) forms. The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHC’s mission spend ratio no later than 90 days after the deadline for receipt of each FQHC’s
submission, and to transmit the report to the State Department of Health Care Services.
submission.
The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, as specified.
This bill would impose penalties for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which would be subject to appropriation by the Legislature, within the Special Deposit Fund.
If an FQHC disputes a determination or assessment, the bill would require the FQHC to simultaneously submit a request for appeal to both the department and the State Department of Health Care Services within 30 days of the FQHC’s receipt of the determination or assessment, as specified. The bill would require the department to submit its responsive arguments and all supporting documents to the FQHC and the State Department of Health Care Services within 30 days of the department’s receipt of the FQHC’s request for appeal. The bill would require the State Department of Health Care Services to hear a timely appeal and issue a decision, as
specified.
This bill would require an FQHC to abate the violation within 2 years after the department imposes an administrative penalty. The bill would prohibit the FQHC from being required to pay the penalty if it meets specified requirements within the abatement period, including reaching an agreement with the department on a plan to spend the total amount of the administrative penalty on mission-directed expenses within 2 years. The bill would require the department to conduct annual audits of any FQHC that has reached an agreement with the department. If the department determines that an FQHC is not in substantial compliance with the agreed-upon plan, the bill would require the FQHC to pay the imposed administrative penalty within 2 working days and to pay other costs, as specified. The bill would provide that appeals run concurrently with the abatement
period.
This bill would authorize an FQHC to apply to the department for a
waiver, for a term of one year from the date of issuance, to provide
waiver providing
a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHC’s economic condition.
The bill would provide that a waiver or alternative mission spend ratio is for a term of one calendar year.
The bill would prescribe various types of information to be reported by an FQHC to obtain a
waiver.
waiver or alternative mission spend ratio. The bill would authorize the department to provide an alternative mission spend ratio to an FQHC to adjust, exclude, or otherwise account for imminently planned capital improvement, as specified, if the assessed penalty will result in the inability for the planned capital improvement to move forward during the next calendar year.
The bill would authorize an FQHC to apply to renew a waiver
or alternative mission spend ratio
at any time no fewer than 180 days before the expiration of the existing
waiver.
waiver or alternative mission spend ratio.
This bill would make its provisions inapplicable to
an FQHC or FQHC look-alike that is owned or operated by a political subdivision of the state or by a tribe or tribal organization
or urban Indian organization
receiving certain federal funding, as specified, or to an FQHC or FQHC look-alike participating in a bona fide labor-management cooperation committee.
The bill would require the department to adopt all regulations necessary to implement these provisions and would authorize the department to implement, interpret, or make specific these provisions, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. The bill would make its provisions severable. The bill would define various terms for purposes of these provisions.