The department, in consultation with the California Association for Adult Day Services, shall develop a rate methodology. The methodology shall take into consideration all allowable costs associated with providing adult day health care services. Once a methodology has been approved by the department, it shall be the basis of future annual rate reviews.

Payment shall be for services provided in accordance with an approved individual plan of care. Billing shall be submitted directly to the department. Additionally, the department shall establish a separately billable and reasonable rate of reimbursement for the initial assessment that takes into account the intensity of services and the skill level of the health professionals required to conduct the mandated three-day assessment of new participant needs and living environment. Subsequent assessments, as needed or required, shall be billed at a lesser amount. The department shall establish utilization controls for assessment days to ensure the appropriate use of assessment and reassessment activity.

Nothing in this section shall preclude the department from entering into specific prospective budgeting and reimbursement agreements with providers.

The Legislature finds and declares all of the following:

adult day health care center shall be determined by the department based on the reasonable cost of providing all of the adult day health care services included within the core services and adjusted to the particular rate year. Services and costs included in the calculation of the daily core services rate shall include, but not be limited to, all of the following:

establishing the total reimbursement limit, direct patient care labor costs may be paid at a specified discrete percentile to ensure maintenance of quality of care.

Services, all of the following:

reports or expert consultation relevant to nonemergency medical transportation services in the community.

(A) The use of the modified cost report, supplemental reports, and the accounting and reporting manual.

(B) Plan of care documentation required to support the separately billable rate components.

(C) Medical necessity and eligibility requirements and documentation.

consultation with the California Association for Adult Day Services, shall establish facility peer groupings as specified in subdivision (m).

year’s reimbursement rate.

report or supplemental report to the cost report, as determined by the frequency the data will be required for calculation of the core rate, shall collect staffing level and salary data for all direct and indirect patient care staff, arranged through either employment or contract.

the department shall reimburse those facilities at 10 percent below the lowest reimbursement limit established in the facility’s peer group pursuant to subdivision (d).

the California Association for Adult Day Services.

Regulations.

groupings remain relevant on a statewide basis.

and the reimbursement limit for the following rate year. Audit adjustments shall include all of the following:

(A) The results of settled appeals. The department shall consider only the findings of audit appeal reports that are issued more than 180 days prior to the beginning of the new rate year.

(B) In the case of peer grouping audit adjustments, audited costs shall be modified by a factor reflecting share-of-cost overpayments and share-of-cost underpayments.

(C) The results of federal audits, when reported to the state, shall be applied in determining audit adjustments.

(D) (i) An adjustment or adjustments to reported costs of adult day health care centers shall be made to reflect changes in state or federal laws and regulations

that would affect those costs, including increases in the minimum wage or increases in minimum staffing requirements.

(ii) The costs described in clause (i) shall be reflected as an add-on to the new rate or rates.

(iii) To the extent not prohibited by federal law or regulations, add-ons to the rate or rates shall continue until those costs are included in cost reports used to set the new rate or rates.

identified, shall be updated at a rate of 2 percent annually.

audit staff.

shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

Federally qualified health centers shall be reimbursed on a prospective payment system rate basis pursuant to Section 14132.100 for the provision of adult day health care services.

certification, or to revoke or suspend licensure to the extent appropriate to ensure consistency and uniformity.

Each adult day health care provider shall maintain a uniform accounting and reporting system as developed by the department, in consultation with the provider. The department shall implement a uniform cost accounting system and train providers in this system by July 1, 1987. The California Department of Aging, in coordination with the department may approve an alternative cost accounting system where the provider demonstrates the ability to report comparable and reliable data. The provider shall submit annual cost reports to the department, unless otherwise specified in an interagency agreement entered into pursuant to Section 1572 of the Health and Safety Code, no later than five months after the close of the licensee’s fiscal year. The report shall be submitted in the format prescribed by the state. Each facility shall maintain, for a period of four years following the submission of annual cost reports, financial and statistical records of the period covered by the cost reports which are accurate and in sufficient detail to substantiate the cost data reported. These records shall be made available to state or federal representatives upon request. The department, unless otherwise specified in an interagency agreement entered into pursuant to Section 1572 of the Health and Safety Code, may request a financial review performed by an independent certified public accountant as part of the provider’s annual cost report. All certified financial statements shall be filed with the department within a period no later than three months after the department’s request. The department, unless otherwise specified in an interagency agreement entered into pursuant to Section 1572 of the Health and Safety Code, may require a limited or complete certified public accountant audit when the monitoring activities carried out pursuant to Section 14573 reveal significant financial management deficiencies.

Each adult day health care provider shall furnish to the department, unless otherwise specified by the interagency agreement entered into pursuant to Section 1572 of the Health and Safety Code, all additional information and reports that the department may find necessary in performing its functions under this chapter. The information and reports shall include, but not be limited to, any statistical information regarding utilization of services, individual treatment plans and individual service reports, costs of health care, and administration the department may require.

All subcontracts for services reimbursable under this chapter shall be entered into pursuant to regulations of the department. All subcontracts shall be in writing, and a copy shall be transmitted to the department for approval prior to taking effect. Each subcontract submitted to the department for approval shall contain the amount of compensation or other consideration which the subcontractor will receive under the terms of the subcontract with the adult day health care provider. However, this section shall not apply to employment contracts of salaried employees of an adult day health care licensee.

All subcontracts to provide health care benefits, including emergency services, shall include a specification that services will be provided to participants to meet the needs of the participants based upon the plans of care. All subcontracts to provide any of the basic services specified in Section 14550 through subcontractors, shall meet all of the qualifications required by, or pursuant to, this chapter as appropriate for the services which the subcontractors are required to perform.

Each subcontract shall require that the subcontractor make all of its books and records pertaining to the goods or services furnished under the terms of the subcontract available for inspection, examination, or copying by the department during normal working hours at the subcontractor’s principal place of business, or at such other place in the state as the department shall designate. Subcontracts between an adult day health care provider and a subcontractor shall be public records and shall be kept on file and be available at the center. The names of the officers and stockholders of the subcontractor shall also be kept on file and be available as public records at the center.