BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 396 (Mitchell)
          
          Hearing Date: 8/25/2011         Amended: 8/15/2011
          Consultant: Katie Johnson       Policy Vote: Health 9-0 Pub. 
          Safety 7-0
          _________________________________________________________________
          ____
          BILL SUMMARY: AB 396 would require the Department of Health Care 
          Services (DHCS) to develop a process to allow counties and the 
          Division of Juvenile Facilities (DJF) within the California 
          Department of Corrections and Rehabilitation (CDCR) to receive 
          any available federal financial participation for health care 
          services provided to juvenile detainees who are admitted as 
          inpatients in a medical institution and who are eligible for 
          Medi-Cal.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           DHCS start-up and ongoing         $50         $100      $100 
          Federal/*
          administrative costs                                    County
                                                                  

          Increased federal      likely significant, in the millions 
          ofFederal
          matching funds for     dollars annually, upon federal approval
          counties and CDCR      and implementation

          Cost avoidance for DJF unknown, likely in the hundreds of 
          General/
          and county inpatient   thousands to millions of dollars,County
                                 upon federal approval and implementation
                                                                  
          *50 percent federal funds, 50 percent county funds.
          _________________________________________________________________
          ____

          STAFF COMMENTS:  SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
          
          This bill would require DHCS, in consultation with counties and 
          DJF, to develop a process to allow counties and CDCR to access 








          AB 396 (Mitchell)
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          federal financial participation for juvenile inmates who are 
          eligible for Medi-Cal benefits and who are admitted as 
          inpatients in a medical institution and to coordinate that 
          process with the one that exists for adult inmates. Medical 
          institutions would include acute psychiatric, sub-acute 
          psychiatric, and general acute care hospitals. 

          This bill would permit eligible inmates to be exempted from 
          enrollment into a managed health care plan. DHCS would be 
          directed to seek any necessary federal approvals. This bill 
          would provide that these provisions would only be implemented to 
          the extent that federal approval is obtained and that existing 
          levels of federal financial participation are not jeopardized. 
          DHCS would be permitted to recoup payments if the federal 
          government determined them to not be allowable.
          This bill would be implemented only in those counties that would 
          elect to voluntarily provide the nonfederal share of 
          expenditures and if DJF voluntarily elects to provide the 
          nonfederal share of expenditures. This bill would specify that 
          participating counties and DHCS would annually negotiate the 
          amount of administrative costs that the county would pay.

          DHCS would need staffing resources of approximately $100,000 
          annually for, first, start -up costs that would include seeking 
          federal approval and developing any state plan amendments or 
          waivers, and, second, ongoing program oversight. Administrative 
          expenditures would be funded with 50 percent federal funds and 
          50 percent General Fund/county funds. If the amount negotiated 
          between the counties and DHCS is insufficient to cover the full 
          administrative costs of the department, there could be General 
          Fund cost pressure to cover the remaining expenditures.

          For participating counties and CDCR, this bill could result in 
          significant increased federal funds likely in the millions of 
          dollars annually which would result in an equal amount of county 
          funds and General Fund offsets. For example, DJF currently pays 
          approximately $873 per psychiatric hospital day and $1415 per 
          general acute care hospital day at a cost of $2,477,962 in 
          calendar year 2010. If DHCS were to be granted approval for this 
          program, federal funds could offset half of those costs. Actual 
          federal funding and subsequent offsets would depend on the 
          number of participating counties and on the number of inmates, 
          both county and state, for whom this would apply.









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          There could be local assistance costs incurred by counties that 
          would determine final Medi-Cal eligibility. These expenditures 
          would be paid for with 50 percent General Fund and 50 percent 
          federal funds.

          AS PROPOSED TO BE AMENDED. The committee's amendments would 
          delete the provision that would specify that counties would 
          negotiate with DHCS the amount of administrative costs that the 
          county would pay. Instead, these amendments would require 
          participating counties to cover the non-federal share of DHCS' 
          administrative expenses, thereby eliminating any General Fund 
          costs associated with DHCS administration.