BILL ANALYSIS
SB 1392
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1392 (Steinberg) - As Amended: August 2, 2010
Policy Committee: Health Vote:18-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill addresses the distribution of funding from the state
to the counties in several mental health programs. Specifically,
this bill:
1)Establishes the Specialty Mental Health Services Federal Trust
Fund (Federal Trust Fund) in the State Treasury. Establishes a
continuous appropriation of the Federal Trust Fund to the
California Department of Health Care Services (DHCS) without
regard to fiscal year. Requires the continuously appropriated
funds to be distributed by DHCS to community mental health
programs based on adjudicated claims.
2)Requires the California Department of Mental Health (DMH) to
allocate and distribute full, annual appropriations of Mental
Health Services Act (MHSA) funding to counties.
3)Deletes a provision in current law that authorizes DMH to
withhold 5% of Mental Health Managed Care funds.
FISCAL EFFECT
1)Establishes an annual continuous appropriation of $500 million
(100% Federal Trust Fund) in Medi-Cal funds to DHCS for
distribution to county-administered, community mental health
programs. The funding mechanism established in this bill is
intended to reduce funding instability and service
interruption that occurs when the state budget is not passed
by the start of the fiscal year.
2)Establishes a lump sum distribution of the Mental Health
Services Act Funding. This lump sum will result in the earlier
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release of $275 million (100% MHSA special funds) from a total
annual allocation of $1.1 billion.
Under current law 75% of MHSA funds are released by the state to
the counties based on planning allocations and proposed county
activities. The final 25% of funds are withheld until counties
provide final reconciliation to the state on activities and
expenditures. This bill would provide a lump sum instead.
3)Ends a 5% withhold of Mental Health Managed Care Funds
resulting in the earlier release of approximately $5 million
each year.
COMMENTS
1)Rationale . This bill increases the continuity of funding to
county mental health programs in two major areas, Medi-Cal and
the Mental Health Services Act. According to the author and
supporters, this bill ensures federal funding remains
available to counties when the state budget is not passed by
the start of the fiscal year. In addition, this bill reduces
funding delays experienced by county MHSA programs by
requiring DMH to end the practice of withholding 25% of county
allocations until local programs report final activities,
outcomes, and expenditures.
According to the author and supporters, county mental health
programs have endured major budget reductions over the past
several years. In addition, several recent audits by the
federal government and state entities have identified
inefficiencies and delays in mental health funding allocation
and distribution methodologies. This bill makes major sources
of funding more readily available to county programs.
2)Specialty Mental Health Services . California's Medi-Cal
specialty mental health program is administered by counties.
DMH contracts with counties to provide mental health services
to Medi-Cal beneficiaries with mental health issues. Specialty
mental health services are carved out of the Medi-Cal program,
meaning they are not administered by DHCS, but governed by DMH
and county mental health departments. Less specialized mental
health services, those provided by primary care physicians,
remain within the purview of DHCS. DHCS has a role in
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reviewing and validating county and state mental health claims
and expenditures under Medi-Cal as the single statewide agency
responsible for Medicaid funding.
3)Mental Health Services Act . Proposition 63, approved by voters
in November 2004, enacted a state personal income tax
surcharge of 1% that applies to taxpayers with annual taxable
incomes of more than $1 million. The funds are used to provide
local mental health services statewide. In the current year,
$1.1 billion in Proposition 63 funding is available for
expenditure.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081