BILL ANALYSIS Ó SB 695 Page 1 SENATE THIRD READING SB 695 (Hancock) As Amended September 2, 2011 Majority vote SENATE VOTE :40-0 HEALTH 19-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Monning, Logue, Ammiano, |Ayes:|Fuentes, Harkey, | | |Atkins, Bonilla, Eng, | |Blumenfield, Bradford, | | |Garrick, Gordon, Hayashi, | |Charles Calderon, Campos, | | |Roger Hernández, | |Davis, Donnelly, Gatto, | | |Bonnie Lowenthal, | |Hall, Hill, Lara, | | |Mansoor, Mitchell, | |Mitchell, Nielsen, Norby, | | |Nestande, Pan, | |Solorio, Wagner | | |V. Manuel Pérez, Silva, | | | | |Smyth, Williams | | | | | | | | ----------------------------------------------------------------- SUMMARY : Authorizes, until January 1, 2014, Medi-Cal benefits to be provided to a Medi-Cal eligible individual awaiting adjudication in a county juvenile detention facility if the county agrees to pay the state's share of Medi-Cal expenditures and administrative costs. Specifically, this bill : 1)Provides that benefits shall be provided until the date of adjudication and requires benefits to be suspended if the individual is placed in an institution. 2)Limits eligibility to an individual who is receiving Medi-Cal benefits at the time of admission or is subsequently determined to be eligible. 3)Specifies that this bill shall not be construed to require a county to pay for Medi-Cal benefits that the state is obligated to provide under administrative action or final court order. 4)Conditions implementation on receipt of written confirmation from the federal Centers for Medicare and Medicaid Services that federal financial participation (FFP) is available and the execution of a declaration by the director of the SB 695 Page 2 Department of Health Care Services (DHCS) that implementation will not jeopardize the state's ability to receive FFP including any increase in the federal assistance percentage available as specified. 5)Authorizes DHCS to recoup any amounts resulting from a disallowance as a result of a federal audit, including any interest. 6)Authorizes the Director of DHCS to cease operation if a determination is made that the declaration specified in 5) above is no longer accurate, authorizes implementation by all-county-letter or similar instructions and requires notice to the Joint Legislative Budget Committee, the Department of Finance and posted on the DHCS Web site. 7)Authorizes initial implementation by all-county letter and sunsets on January 1, 2014. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1)Annual increased Medi-Cal costs, likely in the millions of dollars (50% federal/50% local) to the extent counties opt into the funding mechanism established by this bill and provide Medi-Cal health services to youth awaiting adjudication. 2)Unknown one-time administrative workload to DHCS to seek federal approval, not likely to exceed $100,000. Although this bill requires counties to pay the state share of cost for state administrative workload, it unclear whether the initial workload necessary to receive federal approval will be reimbursed by counties. 3)Unknown ongoing costs (50% federal/50% local) to DHCS to administer the funding mechanism established by this bill, and to county welfare departments to verify the Medi-Cal eligibility status of youth awaiting adjudication and process new applications. This bill requires counties to pay the state share of cost for administrative workload. Actual costs would depend on how many counties opt in to the program and how many youth are found Medi-Cal eligible. COMMENTS : This bill, according to the sponsor, Alameda County, SB 695 Page 3 is intended to take advantage of federal authority to use Medicaid funds to reduce the costs of health and mental health services that the county is already incurring for the first 30 days of a youth's stay in juvenile hall. According to the sponsor, the average length of stay is 24 days. Medi-Cal regulations make individuals who are inmates of public institutions ineligible for Medi-Cal. However, a 2004 letter to State Medicaid Directors from the federal Centers for Medicare and Medicaid Services encourages states to "suspend" and not "terminate" benefits while a person is in a public institution or Institute for Mental Disease, noting the payment exclusion (known as the "inmate exception") under Medicaid does not affect the eligibility of an individual for the Medicaid Program. This policy was codified with regard to juveniles in SB 1147 (Calderon and Yee), Chapter 546, Statutes of 2008. DHCS indicated that the necessary protocols to implement a suspension of benefits were issued in March 2010. Federal regulations also appear to allow states to claim FFP for all Medicaid services provided to a person in a public institution for a temporary period pending other arrangements as an exception to unavailability of FFP for services provided to inmates. This bill is based on information from Pennsylvania and New Mexico, two states that have taken advantage of this opportunity. SB 1091 (Hancock) of 2010 was substantially similar to this bill and was vetoed. The veto message cited inconsistency with federal law and potentially significant state costs. This bill, as drafted, appears to be consistent with federal law and does not appear to expose the state to significant costs. Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097 FN: 0002567