BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 695 (Hancock)
          
          Hearing Date: 5/26/2011         Amended: 5/23/2011
          Consultant: Katie Johnson       Policy Vote: Health 9-0
          
















































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          BILL SUMMARY: SB 695 would permit counties to pay the 
          non-federal share of Medi-Cal for eligible youth temporarily 
          placed in a county juvenile detention facility for up to 30 days 
          or until their case is adjudicated, whichever is shorter, in 
          order to access available federal Medi-Cal funding.
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                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund

           Federal funds match to   likely in the millions        County/*
          counties for Medi-Cal benefits  of dollars annually    Federal

          DHCS administration      likely up to $100 annually 
          ongoingCounty/*
                                                                 Federal
                        
          *50 percent county funds, 50 percent federal funds
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          STAFF COMMENTS: SUSPENSE FILE.
          
          Commencing January 1, 2012, or upon federal approval, whichever 
          is later, this bill would permit all counties to receive federal 
          funds for Medi-Cal eligible youth temporarily placed in a county 
          juvenile detention facility prior to adjudication for up to 30 
          days or until adjudication, whichever time period is less, 
          provided the county pay the state share of matching funds. 
          Currently, counties pay for the full cost of health care for 
          these individuals, including for medical and behavioral health 
          needs. These youth are residents of the facility temporarily 
          while awaiting adjudication. To the extent that the Centers for 
          Medicare and Medicaid Services (CMS) determine that their 
          temporary residence does not make them inmates of a non-medical 
          public institution, they could be eligible for Medi-Cal benefits 
          and the counties could access millions of dollars in new federal 
          funds.

          This bill would be contingent upon federal approval, the 
          availability of federal financial participation, and on the 
          county's commitment to pay the state's share of Medi-Cal 
          expenditures and administrative costs for benefits provided for 








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          in these provisions through intergovernmental transfers (IGTs) 
          of funds. It is unclear whether or not the federal government 
          would approve such a system of reimbursement. 

          Increased Federal Fund Expenditures
          There would be increased costs in federal funds due to 
          approximately up to one month of Medi-Cal eligibility for youth 
          who continue their coverage and who enroll in Medi-Cal while 
          temporarily placed in the facility, likely in the hundreds of 
          thousands of dollars. For example, Alameda County states that it 
          spends about $7 million annually on health care for its juvenile 
          detention facility. If the county could receive federal matching 
          funds for even half of its population, this would equate to 
          $1.75 million in federal funds annually at a sharing ratio of 50 
          percent county and 50 percent federal funds. Since the federal 
          financial participation would be part of the Medicaid 
          entitlement program, there would be no upper limit on the amount 
          of federal funds that a county could access, provided they 
          furnished the appropriate county matching funds. 

          It is unknown how many counties would choose to seek Medi-Cal 
          reimbursement for services provided to these youth. However, 
          since counties currently pay all of these costs, there would be 
          an incentive to seek matching federal funds. Impacts on federal 
          and county funds would depend upon the number of participating 
          counties.

          DHCS Staff and Regulations
          This bill would require the Department of Health Care Services 
          (DHCS) to adopt regulations implementing this bill by January 1, 
          2013. The regulation process generally takes 18 months to 2 
          years to complete. DHCS would need increased staff for 1 
          calendar year in order to complete the process in a shorter time 
          at a cost of $200,000 - $300,000. The staff costs would be paid 
          50 percent General Fund and 50 percent federal funds, since the 
          bill does not require a participating county to offset the 
          one-time regulation expenditures. 

          Additionally, the department would likely need staff to process 
          and monitor IGTs at an estimated cost of $50,000 - $100,000 
          annually. DHCS staff costs would be shared 50 percent county and 
          50 percent federal funds. Since Medi-Cal pays for eligibility 
          determination performed at the county level, there could be 
          General Fund and federal cost pressure to the extent there are 








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          increased county administrative costs. For example, in order to 
          access federal funds, a county could choose to determine if a 
          youth placed temporarily in a facility is Medi-Cal eligible and 
          refer them to the county for an eligibility determination.

          Potential General Fund Cost Pressure
          If a county chooses to determine the eligibility of unenrolled 
          youth, since they are minors, it would be reasonable to assume 
          that a county welfare department would contact their families 
          for financial eligibility information and would subsequently 
          work to enroll any eligible family member as well. The costs of 
          intake and benefits in Medi-Cal for the family members for one 
          month of Medi-Cal that they would not have accessed otherwise 
          would be indeterminate. Associated costs would be shared 50 
          percent General Fund and 50 percent federal funds.

          The author's recent amendments would permit the use of county 
          funds for the development of regulations in place of the General 
          Fund as the traditional state match. The recent amendments would 
          require DHCS to adopt regulations by January 1, 2015, instead of 
          January 1, 2013. Since this change would give the department 
          more time to promulgate regulations, the regulations costs would 
          likely be minor when spread across all available fiscal years.