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) Page 1 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. AB 396 (Mitchell) Page 2 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.