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 _________________________________________________________________ ____ 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. _________________________________________________________________ ____ 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 _________________________________________________________________ ____ 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 SB 695 (Hancock) Page 3 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 SB 695 (Hancock) Page 4 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.