Cal. Welfare and Institutions Code § 14711

(a) The department shall develop, in consultation with the County Behavioral Health Directors Association of California, a reimbursement methodology for use in the Medi-Cal claims processing and interim payment system that maximizes federal funding and utilizes, as much as practicable, federal Medicaid and Medicare reimbursement principles. The department shall work with the federal Centers for Medicare and Medicaid Services in the development of the methodology required by this section. (b) Reimbursement amounts developed through the methodology required by this section shall be consistent with federal Medicaid requirements and the approved Medicaid state plan and waivers. (c) Administrative costs shall be claimed separately in a manner consistent with federal Medicaid requirements and the approved Medicaid state plan and waivers and shall be limited to 15 percent of the total actual cost of direct client services. (d) The cost of performing quality assurance and utilization review activities shall be reimbursed separately and shall not be included in administrative cost. (e) The reimbursement methodology established pursuant to this section shall be based upon certified public expenditures, which encourage economy and efficiency in service delivery. (f) The reimbursement amounts established for direct client services pursuant to this section shall be based on increments of time for all noninpatient services. (g) The reimbursement methodology shall not be implemented until it has received any necessary federal approvals. (h) This section shall become operative on July 1, 2012.