BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1297
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                AB 1297 (Chesbro) - As Introduced:  February 18, 2011 

          Policy Committee:                              HealthVote:19-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill limits requirements governing federal reimbursement to 
          county Medi-Cal mental health plans to requirements outlined in 
          federal law and in the approved Medicaid state plan and waivers. 


           FISCAL EFFECT  

          1)Costs to the state Department of Mental Health (DMH), not 
            likely to exceed $50,000, to modify regulations governing 
            reimbursement to county Medi-Cal mental health plans.

          2)Unknown, significant increased federal funding to counties 
            from loosening state restrictions on leveraging federal funds. 
             Counties estimate that statewide, they may be able to claim 
            additional federal finding in the range of $50-100 million.  

           COMMENTS  

           1)Rationale  . According to the sponsor, the California Mental 
            Health Directors Association (CMHDA), this bill seeks to 
            eliminate unnecessary state-only Medi-Cal requirements in the 
            provision of Medi-Cal specialty mental health services. CMHDA 
            notes that California has established a number of state-only 
            requirements that needlessly limit the amount of federal 
            Medicaid reimbursement that is available, such as shorter 
            billing periods and lower reimbursement amounts than are 
            allowed under federal law. 

           2)Background  .  Mental health services in the Medi-Cal program 
            are "carved out" of regular Medi-Cal services. The Mental 
            Health Managed Care program provides specialty mental health 








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            services to Medi-Cal-eligible adults through county Mental 
            Health Plans (MHPs). Individuals are entitled to specialty 
            mental health services if the service is both covered under 
            the Medi-Cal Program and deemed medically necessary.  Services 
            include mental health assessments, group or individual 
            therapy, medication support services, intensive day treatment, 
            crisis intervention and stabilization, and residential 
            treatment services.

            The scope and features of the specialty mental health services 
            provided at the county level are determined by the state's 
            Medicaid 1915(b) waiver, the federally-approved Medicaid state 
            plan, and state plan amendments.  

           3)State Restrictions Loosened  . In some cases, the state DMH has 
            imposed requirements on county MHPs beyond what federal law 
            requires, in an attempt to provide greater oversight of 
            expenditures.  There are three specific provisions that limit 
            the amount of federal reimbursement counties can claim: 

             a)   The state has created a Schedule of Maximum Allowances 
               (SMAs) that are effectively maximum rates for each service 
               category (in state regulation), which are in some cases 
               lower than the federal maximum payments.

             b)   The state restricts the time to submit claims for six 
               months (in state regulation), which is shorter than the 12 
               months allowed under federal law.  

             c)   The state imposes a statutory administrative cost cap of 
               15%, whereas federal law has no such cap.

            By preventing state requirements for claiming FFP from 
            exceeding federal requirements, this bill provides counties 
            the ability to leverage federal funding for costs that exceed 
            the state's SMA and would allow counties to submit claims 
            after the state's six-month limit.  It also eliminates the 
            statutory 15% administrative cap, which counties indicate is 
            needed due to increased administrative duties that have been 
            imposed since the cap was put in to place.  

            Seven counties provided county-specific estimates of the 
            increases in federal funding expected as a result of this 
            bill: Marin ($3 million), Orange ($4 million), San Francisco 
            ($12 million), San Mateo ($5.4 million), Sutter-Yuba ($2.2 








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            million), and Solano ($2.1 million).  

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081