BILL NUMBER: SB 1447 CHAPTERED 09/15/02 CHAPTER 543 FILED WITH SECRETARY OF STATE SEPTEMBER 15, 2002 APPROVED BY GOVERNOR SEPTEMBER 13, 2002 PASSED THE SENATE AUGUST 30, 2002 PASSED THE ASSEMBLY AUGUST 27, 2002 AMENDED IN ASSEMBLY AUGUST 23, 2002 AMENDED IN ASSEMBLY JULY 3, 2002 AMENDED IN SENATE MAY 23, 2002 AMENDED IN SENATE APRIL 1, 2002 INTRODUCED BY Senator Chesbro (Coauthor: Assembly Member Washington) FEBRUARY 15, 2002 An act to amend Sections 11218, 11219, 11758.42, and 11758.46 of the Health and Safety Code, relating to controlled substances. LEGISLATIVE COUNSEL'S DIGEST SB 1447, Chesbro. Treatment of addicts: drug treatment programs. Existing law provides that it is a misdemeanor or a felony for a physician treating a person for addiction to prescribe for, or furnish to, the person more than 180 milligrams of methadone or 200 milligrams of levoalphacetylmethadol (LAAM) during each day of the treatment. This bill would repeal the limits on the amount of methadone and LAAM that a physician treating a person for addiction may lawfully prescribe for or furnish to that person during each day of the treatment. Existing law provides for the Medi-Cal Drug Treatment Program, under which each county enters into contracts with the State Department of Alcohol and Drug Programs for the provision of various drug treatment services to Medi-Cal recipients, or the department directly arranges for the provision of these services if a county elects not to do so. Under existing law, the department is responsible for licensing narcotic treatment programs to use replacement narcotic therapy in the treatment of addicted persons whose addiction was acquired or supported by the use of a narcotic drug or drugs, not in compliance with a physician and surgeon's legal prescription. Existing law provides for reimbursement for narcotic replacement therapy dosing and ancillary services provided by narcotic treatment programs, and limits reimbursement for narcotic treatment program services to those services specified in state law and state and federal regulations governing the licensing and administration of narcotic treatment programs. Existing law defines the services reimbursable under this program, and establishes contracting, billing, and reimbursement procedures governing this program. This bill would establish criteria, as specified, for determining the uniform statewide monthly reimbursement rate for narcotic replacement therapy dosing and ancillary services. Existing law, added by initiative statute (Proposition 36), provides that effective July 1, 2001, except as specified, a person convicted of a nonviolent drug possession offense is required to receive probation with completion of a drug treatment program as a condition of probation. That initiative statute also provides that effective July 1, 2001, except as specified, a person's parole may not be suspended or revoked for the commission of a nonviolent drug possession offense or for violating a drug-related condition of parole, but that an additional condition of parole for those offenses or violations shall be completion of a drug treatment program. Existing law provides that reimbursement to narcotic treatment program providers shall be limited to the lower of either the uniform statewide monthly reimbursement rate, or the provider's usual and customary charge to the general public for the same or similar service. This bill would provide that reimbursement paid to a narcotic treatment program provider by a county for services provided to clients pursuant to Proposition 36, and for which the client is not liable for paying, does not constitute a usual and customary charge to the general public. Existing law requires certified narcotic treatment program providers that are exclusively billing the state or county for services under these provisions to submit accurate and complete performance reports, as specified. This bill would impose the same requirements on certified narcotic treatment program providers that are exclusively billing the state or county for services to persons pursuant to Proposition 36. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 11218 of the Health and Safety Code is amended to read: 11218. A physician treating an addict for addiction may not prescribe for or furnish to the addict more than any one of the following amounts of controlled substances during each of the first 15 days of that treatment: (a) Eight grains of opium. (b) Four grains of morphine. (c) Six grains of Pantopon. (d) One grain of Dilaudid. (e) Four hundred milligrams of isonipecaine (Demerol). SEC. 2. Section 11219 of the Health and Safety Code is amended to read: 11219. After 15 days of treatment, the physician may not prescribe for or furnish to the addict more than any one of the following amounts of controlled substances during each day of the treatment: (a) Four grains of opium. (b) Two grains of morphine. (c) Three grains of Pantopon. (d) One-half grain of Dilaudid. (e) Two hundred milligrams of isonipecaine (Demerol). SEC. 3. Section 11758.42 of the Health and Safety Code is amended to read: 11758.42. (a) For purposes of this chapter, "LAAM" means levoalphacetylmethadol. (b) (1) The department shall establish a narcotic replacement therapy dosing fee for methadone and LAAM. (2) In addition to the narcotic replacement therapy dosing fee provided for pursuant to paragraph (1), narcotic treatment programs shall be reimbursed for the ingredient costs of methadone or LAAM dispensed to Medi-Cal beneficiaries. These costs may be determined on an average daily dose of methadone or LAAM, as set forth by the department, in consultation with the State Department of Health Services. (c) Reimbursement for narcotic replacement therapy dosing and ancillary services provided by narcotic treatment programs shall be based on a per capita uniform statewide monthly reimbursement rate for each individual patient, as established by the department, in consultation with the State Department of Health Services. The uniform statewide monthly reimbursement rate for narcotic replacement therapy dosing and ancillary services shall be based upon, where available and appropriate, all of the following: (1) The outpatient rates for the same or similar services under the fee-for-service Medi-Cal program. (2) Cost report data. (3) Other data deemed reliable and relevant by the department. (4) The rate studies completed pursuant to Section 54 of Assembly Bill 3483 of the 1995-96 Regular Session of the Legislature. (d) The uniform statewide monthly reimbursement rate for ancillary services shall not exceed, for individual services or in the aggregate, the outpatient rates for the same or similar services under the fee-for-service Medi-Cal program. (e) The uniform statewide monthly reimbursement rate shall be established after consultation with narcotic treatment program providers and county alcohol and drug program administrators. (f) Reimbursement for narcotic treatment program services shall be limited to those services specified in state law and state and federal regulations governing the licensing and administration of narcotic treatment programs. These services shall include, but are not limited to, all of the following: (1) Admission, physical evaluation, and diagnosis. (2) Drug screening. (3) Pregnancy tests. (4) Narcotic replacement therapy dosing. (5) Intake assessment, treatment planning, and counseling services. Frequency of counseling or medical psychotherapy, outcomes, and rates shall be addressed through regulations adopted by the department. For purposes of this paragraph, these services include, but are not limited to, substance abuse services to pregnant and postpartum Medi-Cal beneficiaries. (g) Reimbursement under this section shall be limited to claims for narcotic treatment program services at the uniform statewide monthly reimbursement rate for these services. These rates shall be exempt from the requirements of Section 14021.6 of the Welfare and Institutions Code. (h) (1) Reimbursement to narcotic treatment program providers shall be limited to the lower of either the uniform statewide monthly reimbursement rate, pursuant to subdivision (c), or the provider's usual and customary charge to the general public for the same or similar service. (2) (A) Reimbursement paid by a county to a narcotic treatment program provider for services provided to any person subject to Section 1210.1 or 3063.1 of the Penal Code, and for which the individual client is not liable to pay, does not constitute a usual and customary charge to the general public for the purposes of this section. (B) Subparagraph (A) does not constitute a change in, but is declaratory of, existing law. (i) Reimbursement for narcotic treatment program services provided by narcotic treatment program providers shall, if the patient receives less than a full month of services, be prorated to the daily cost per patient, based on the annual cost per patient and a 365-day year. No program shall be reimbursed for services not rendered to or received by a patient of a narcotic treatment program. (j) Reimbursement for narcotic treatment program services provided to substance abusers shall be administered by the department and counties electing to participate in the program. Utilization and payment for these services shall be subject to federal medicaid and state utilization and audit requirements. SEC. 4. Section 11758.46 of the Health and Safety Code is amended to read: 11758.46. (a) For purposes of this section, "drug-Medi-Cal services" means all of the following services, administered by the department, and to the extent consistent with state and federal law: (1) Narcotic treatment program services, as set forth in Section 11758.42. (2) Day care habilitative services. (3) Perinatal residential services for pregnant women and women in the postpartum period. (4) Naltrexone services. (5) Outpatient drug-free services. (b) Upon federal approval of a federal medicaid state plan amendment authorizing federal financial participation in the following services, and subject to appropriation of funds, "drug-Medi-Cal" services shall also include the following services, administered by the department, and to the extent consistent with state and federal law: (1) Notwithstanding subdivision (a) of Section 14132.90 of the Welfare and Institutions Code, day care habilitative services, which, for purposes of this paragraph, are outpatient counseling and rehabilitation services provided to persons with alcohol or other drug abuse diagnoses. (2) Case management services, including supportive services to assist persons with alcohol or other drug abuse diagnoses in gaining access to medical, social, educational, and other needed services. (3) Aftercare services. (c) The department shall adopt emergency regulations to implement subdivision (b). The regulations shall be developed in conjunction with appropriate stakeholders. (d) (1) By July 1, 1997, and annually thereafter, the department shall publish procedures for contracting for drug-Medi-Cal services with certified providers and for claiming payments, including procedures and specifications for electronic data submission for services rendered. (2) By July 1, 1997, the department, county alcohol and drug program administrators, and alcohol and drug service providers shall automate the claiming process and the process for the submission of specific data required in connection with reimbursement for drug-Medi-Cal services, except that this requirement applies only if funding is available from sources other than those made available for treatment or other services. (e) A county or a contractor for the provision of drug-Medi-Cal services shall notify the department, within 30 days of the receipt of the county allocation, of its intent to contract, as a component of the single state-county contract, for and provide certified services pursuant to Section 11758.42 for the proposed budget year. The notification shall include an accurate and complete budget proposal, the structure of which shall be mutually agreed to by county alcohol and drug program administrators and the department, in the format provided by the department, for specific services, for a specific time period, estimated units of service, estimated rate per unit consistent with law and regulations, and total estimated cost for appropriate services. (f) (1) Within 30 days of receipt of the proposal described in subdivision (e), the department shall provide, to counties and contractors proposing to provide drug-Medi-Cal services in the proposed budget year, a proposed multiple-year contract, as a component of the single state-county contract, for these services, a current utilization control plan, and appropriate administrative procedures. (2) A county contracting for alcohol and drug services shall receive a single state-county contract for the net negotiated amount and drug-Medi-Cal services. (3) Contractors contracting for drug-Medi-Cal services shall receive a drug-Medi-Cal contract. (g) (1) Upon receipt of a contract proposal pursuant to subdivision (e), a county and a contractor seeking to provide reimbursable drug-Medi-Cal services and the department may begin negotiations and the process for contract approval. (2) If a county does not approve a contract by July 1 of the appropriate fiscal year, in accordance with subdivisions (d) to (f), inclusive, the county shall have 30 additional days in which to approve a contract. If the county has not approved the contract by the end of that 30-day period, the department shall contract directly for services within 30 days. (3) Counties shall negotiate contracts only with providers certified to provide reimbursable drug-Medi-Cal services and that elect to participate in this program. Upon contract approval by the department, a county shall establish approved contracts with certified providers within 30 days following enactment of the annual Budget Act. A county may establish contract provisions to ensure interim funding pending the execution of final contracts, multiple-year contracts pending final annual approval by the department, and, to the extent allowable under the annual Budget Act, other procedures to ensure timely payment for services. (h) (1) For counties and contractors providing drug-Medi-Cal services, pursuant to approved contracts, and that have accurate and complete claims, reimbursement for services from state General Fund moneys shall commence no later than 45 days following the enactment of the annual Budget Act for the appropriate state fiscal year. (2) For counties and contractors providing drug-Medi-Cal services, pursuant to approved contracts, and that have accurate and complete claims, reimbursement for services from federal medicaid funds shall commence no later than 45 days following the enactment of the annual Budget Act for the appropriate state fiscal year. (3) By July 1, 1997, the State Department of Health Services and the department shall develop methods to ensure timely payment of drug-Medi-Cal claims. (4) The State Department of Health Services, in cooperation with the department, shall take steps necessary to streamline the billing system for reimbursable drug-Medi-Cal services, to assist the department in meeting the billing provisions set forth in this subdivision. (i) The department shall submit a proposed interagency agreement to the State Department of Health Services by May 1 for the following fiscal year. Review and interim approval of all contractual and programmatic requirements, except final fiscal estimates, shall be completed by the State Department of Health Services by July 1. The interagency agreement shall not take effect until the annual Budget Act is enacted and fiscal estimates are approved by the State Department of Health Services. Final approval shall be completed within 45 days of enactment of the Budget Act. (j) (1) A county or a provider certified to provide reimbursable drug-Medi-Cal services, that is contracting with the department, shall estimate the cost of those services by April 1 of the fiscal year covered by the contract, and shall amend current contracts, as necessary, by the following July 1. (2) A county or a provider, except for a provider to whom subdivision (k) applies, shall submit accurate and complete cost reports for the previous state fiscal year by November 1, following the end of the state fiscal year. The department may settle cost for drug-Medi-Cal services, based on the cost report as the final amendment to the approved single state-county contract. (k) Certified narcotic treatment program providers, that are exclusively billing the state or the county for services rendered to persons subject to Section 1210.1 of the Penal Code, Section 3063.1 of the Penal Code, or Section 11758.42 shall submit accurate and complete performance reports for the previous state fiscal year by November 1 following the end of that state fiscal year. A provider to which this subdivision applies shall estimate its budgets using the uniform state monthly reimbursement rate. The format and content of the performance reports shall be mutually agreed to by the department, the County Alcohol and Drug Program Administrators Association of California, and representatives of the narcotic treatment providers.