Section 12302.6.

(a) A managed care health plan may enter into contracts pursuant to paragraph (14) of subdivision (a) of Section 14186.35 solely in the manner prescribed in this section.

(b) For purposes of this section:

(1) "Agency" means a city, county, city and county agency, local health district, proprietary agency, or an entity that has or seeks a contract to provide in-home supportive services pursuant to Section 12301.6 or 12302 or this article.

(2) "Contract provider" means any person employed by an agency for the provision of services listed in this section.

(3) "County" means a political unit, unless otherwise indicated.

(4) "Department" means the State Department of Social Services.

(5) "Individual provider" means any person authorized to provide in-home supportive services under this article and Sections 14132.95, 14132.952, and 14132.956, pursuant to the individual provider mode referenced in Section 12302.2. As used in this paragraph, "individual provider" shall not include any person providing in-home supportive services pursuant to a county-employed homemaker mode or a contract provider.

(6) "Individual provider rate" means the combined total rate for wages and benefits for individual providers, as approved by the Statewide Authority or its delegate.

(7) "Managed care health plan" shall have the same meaning as set forth in Section 14186.1.

(8) "Qualified agency" means an agency that has been certified by the department.

(9) "Responsible party" means an officer or director of the applicant, a shareholder with a beneficial interest in the applicant exceeding 10 percent, or the person who will be primarily responsible for any contract with the managed care health plan.

(10) "Statewide Authority" means the California In-Home Supportive Services Authority established pursuant to Section 6531.5 of the Government Code.

(c) Managed care health plans shall assume the authority granted to counties pursuant to Section 12302 to contract for the provision of in-home supportive services with an agency.

(1) (A) Managed care health plans shall assume the authority as described in subdivision (a) only upon the integration of the In-Home Supportive Services Program into Medi-Cal managed care pursuant to Article 5.7 (commencing with Section 14186) of Chapter 7 in the counties participating in the demonstration project authorized under Section 14132.275. For individuals exempt from the provisions of Article 5.7 (commencing with Section 14186) of Chapter 7, as specified in subdivision (c) of Section 14186.2, this section shall not apply, and Section 12302 shall apply.

(B) If, at the time a managed care health plan assumes contracting authority pursuant to this subdivision with respect to a particular geographic area, there is an existing contract between the county and an agency for the provision of in-home supportive services, the managed care health plan shall enter into a contract with the county to continue providing the services, and the county shall maintain its existing contract with the agency for the provision of in-home supportive services until such time as that contract is due to expire. Agencies that have these existing contracts with a county at the time a managed care health plan assumes contracting authority pursuant to this subdivision shall automatically be certified as qualified agencies.

(2) An agency that is a county, or has an existing contract with a county, as of the date that the managed care health plan in the corresponding geographic area assumes contracting authority with respect to agencies, shall be deemed to be certified as a qualified agency with respect to the geographic area in which the agency has a contract to provide in-home supportive services with respect to the type of in-home supportive services provided pursuant to that contract. Where a county has an existing contract with an agency, the certification provided for in this subdivision shall remain in effect until the triennial deadline established by paragraph (3) of subdivision (d) that occurs no less than one year after the expiration of the contract in effect at the time that the managed care health plan assumes contracting authority with respect to agencies. However, if an agency that is party to such a contract seeks to expand the geographic area in which it is certified to provide services or seeks to expand the types of services for which it is certified, it must submit an application in accordance with subdivision (d).

(d) An agency contracting with a managed care health plan for the provision of in-home supportive services shall be certified as a qualified agency by the department in consultation with the State Department of Health Care Services.

(1) The certification of an agency as a qualified agency shall be with respect to a specific geographic area and an identified category of services.

(2) The department shall develop an application form and establish the conditions to be met for certification as a qualified agency.

(3) An agency seeking certification as a qualified agency shall submit to the department a verified application showing that it satisfies the conditions established by the department, pursuant to this subdivision, and shall provide the information specified, which shall include all of the following:

(A) The three most recent audited financial statements or other independently verified documentation showing that the applicant maintains liquid assets sufficient to cover 180 days of in-home supportive services' operating expenses. A nonprofit or public entity applicant may instead satisfy this requirement by providing a letter of support signed by a representative of the public entity or managed care organization responsible for the majority of the applicant's revenue stating its intent to continue to provide funding for IHSS in the event there is a disruption in the applicant's revenue.

(B) Evidence of liability and workers' compensation insurance.

(C) Evidence that the applicant has not been the subject of bankruptcy proceedings in the last five years.

(4) The department shall establish an annual deadline for submitting applications for certification pursuant to this subdivision. The department shall also establish a triennial deadline for submitting renewals of certification pursuant to this subdivision. The department shall process and approve or deny applications within 120 days of receipt of a completed application.

(5) In determining whether an agency may be certified as a qualified agency, the department, in consultation with the State Department of Health Care Services, shall consider documents and evidence to ensure that, among other things identified by the department, the agency:

(A) Guarantees the continuity and reliability of services to recipients.

(B) Guarantees the supervision of contract providers.

(C) Guarantees that each contract provider has been screened in accordance with Sections 12305.81 and 12305.87.

(D) Guarantees that each contract provider is capable of and is providing the service authorized.

(E) Complies with applicable rules and regulations regarding civil rights.

(F) Is capable of providing high-quality and reliable in-home supportive services.

(G) Is capable of complying with this section, any rules or regulations promulgated under this section, and any applicable federal rules and regulations.

(H) Has not demonstrated a pattern and practice of violations of state or federal laws and regulations based on any available information.

(6) An application for certification under this subdivision may be denied by the department if the department determines that the applying agency or a responsible party has violated a law or regulation that is substantially related to the qualifications or duties of the applying agency or is substantially related to the functions of the business for which certification was, or is to be, issued, or on the ground that an applying agency knowingly made a false statement of fact required to be revealed in an application for certification.

(7) The department shall develop a written appeal process for any agency dissatisfied with the decision of the department regarding certification.

(e) (1) A qualified agency shall submit verified cost reports to the department documenting that the qualified agency is in compliance with subdivision (i). The cost reports shall be verified by the responsible party and by a representative of a certified public accounting firm.

(2) The verified cost reports required by paragraph (1) shall be submitted within 90 calendar days after the end of each year and within 60 calendar days after any change in compensation negotiated by the Statewide Authority for individual providers has gone into effect.

(f) A managed care health plan that has entered into a contract in the manner prescribed in this section shall notify the department within 30 days if the contract between the managed care health plan and the qualified agency is suspended or terminated for any reason.

(g) A recipient of in-home supportive services may only be referred to a qualified agency by the county, managed care health plan, or care coordination teams. Qualified agencies, counties, and managed care health plans shall establish procedures to ensure contract limitations on caseload specified in subdivision (k) are being met and there is coordination of information between managed care health plans, qualified agencies, counties, and the department. When a recipient has been referred by the managed care health plan, the qualified agency may provide services in the following circumstances:

(1) It has been determined that the recipient is unable to function as the employer of the provider due to dementia, cognitive impairment, or other similar issues.

(2) The recipient has been identified to need services under this mode by the care coordination team created pursuant to paragraph (3) of subdivision (b) of Section 14186.

(3) The recipient is unable to retain a provider due to geographic isolation and distance, authorized hours, or other reasons.

(h) When a recipient who is severely impaired, as described in subdivision (b) of Section 12303.4, is referred to a qualified agency by a managed care health plan, the county, or the care coordination team, the qualified agency may provide emergency backup services, as needed, when a provider is unavailable due to vacation, illness, or other extraordinary circumstances, or the recipient is in the process of hiring or replacing a provider. Qualified agencies shall establish procedures to ensure contract limitations on caseload are being met and there is coordination of information between managed care health plans, qualified agencies, counties, and the department.

(i) Service hours provided under this section shall be deducted from the in-home supportive services recipient's current authorized hours of services and on an hour-to-hour basis coordinated with the county and the department to ensure hours are accurately captured and not duplicated per in-home supportive services program requirements.

(j) Wages and benefits for contract providers for their provision of in-home supportive services shall not be less than the individual provider rate negotiated by the Statewide Authority for the county where services are provided.

(k) Any contract entered into between a managed care health plan and a qualified agency shall provide for a minimum amount of service utilization and shall be approved by the department. In no case, however, shall in-home supportive services recipients referred for services exceed 5 percent of the in-home supportive services caseload in the county where services are provided.

(l) The department shall establish reasonable fees to be paid by agencies and qualified agencies for administering the provisions of this section, including, but not limited to, fees associated with processing applications for certification and renewals of certification, and fees associated with monitoring and enforcing compliance, including any fees reflecting the costs associated with investigating complaints, to the extent permissible by law. These fees shall be sufficient to cover the department's reasonable costs incurred in administering the provisions of this section.

(m) The state shall be immune from liability resulting from the state's implementation of this section or from the negligence or intentional torts of a contract provider providing services pursuant to this section.

(n) 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 department may implement, interpret, or make specific this section by means of all-county letters, or similar instructions, without taking regulatory action. Prior to issuing any letter or similar instrument authorized pursuant to this section, the department shall notify and consult with stakeholders, including beneficiaries, providers, and advocates.

(Amended by Stats. 2012, Ch. 439, Sec. 35. Effective September 22, 2012. Conditionally inoperative as prescribed by Stats. 2013, Ch. 37, Sec. 34.)