BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 695|
          |Office of Senate Floor Analyses   |                         |
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                              UNFINISHED BUSINESS


          Bill No:  SB 695
          Author:   Hancock (D)
          Amended:  9/2/11
          Vote:     21

           
           SENATE HEALTH COMMITTEE  :  9-0, 4/6/11
          AYES:  Hernandez, Strickland, Alquist, Anderson, Blakeslee, 
            De León, DeSaulnier, Rubio, Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  9-0, 5/26/11
          AYES:  Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley, 
            Price, Runner, Steinberg

           SENATE FLOOR  :  40-0, 6/1/11
          AYES:  Alquist, Anderson, Berryhill, Blakeslee, Calderon, 
            Cannella, Corbett, Correa, De León, DeSaulnier, Dutton, 
            Emmerson, Evans, Fuller, Gaines, Hancock, Harman, 
            Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu, 
            Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, 
            Runner, Simitian, Steinberg, Strickland, Vargas, Walters, 
            Wolk, Wright, Wyland, Yee

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Medi-Cal:  county juvenile detention facilities

           SOURCE  :     Alameda County


           DIGEST  :    This bill authorizes, until January 1, 2014, 
          Medi-Cal benefits to be provided to a Medi-Cal eligible 
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          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.

           Assembly Amendments  clarify that counties will pay the 
          state's costs for both its share of Medi-Cal benefits and 
          for administering and implementing the program, delete the 
          requirement that DHCS adopt regulations to implement this 
          bill, authorize DHCS to recoup all cost, with interest, 
          resulting from a federal audit disallowance, and add a 
          sunset of January 1, 2014.

           ANALYSIS  :    

          Existing federal law:

          1. Defines, in federal Medicaid law, the term "medical 
             assistance" as payment of the cost of specified care and 
             services, such as inpatient hospital services, 
             outpatient hospital services, and physician services.  
             The term "medical assistance" generally does not include 
             care or services for an inmate of a public institution, 
             except for inpatient psychiatric hospital services for 
             individuals under age 21.

          2. Prohibits, through federal Medicaid regulations, federal 
             financial participation (FFP) from being available for 
             services provided to individuals who are "inmates of 
             public institutions."  

          3. Exempts from the definition of "inmate of a public 
             institution" a person who is in a public institution for 
             a temporary period pending other arrangements 
             appropriate to his or her needs.

          Existing state law:

          1. Establishes the Medi-Cal program, administered by the 
             Department of Health Care Services (DHCS), which 
             provides comprehensive health benefits to low-income 
             children, their parents or caretaker relatives, pregnant 
             women, elderly, blind or disabled persons, nursing home 
             residents, and refugees who meet specified eligibility 
             criteria.  Medi-Cal family income eligibility for 

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             children ages 0 to 1 extends up to 200 percent of the 
             federal poverty level (FPL), children ages 1 to 5 with 
             family incomes up to 133 percent of the FPL, and 
             children ages 6 to 19 with family incomes up to 100 
             percent of the FPL.

          2. Requires benefits provided under the Medi-Cal program to 
             an individual under 21 years of age who is an inmate of 
             a public institution to be suspended on the date he or 
             she becomes an inmate of a public institution.  The 
             suspension ends on the date the individual is no longer 
             an inmate of a public institution, or one year from the 
             date he or she becomes an inmate of a public 
             institution.  Health care services under Medi-Cal are 
             not available to inmates of public institutions whose 
             Medi-Cal benefits have been suspended.

          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 FFP is available and the 
             execution of a declaration by the Director of 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. 


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          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. 

           Comments  

          If a county elected the option in this bill, this bill will 
          enable federal Medicaid matching funds to be drawn down to 
          treat youth who are pending adjudication in a county 
          juvenile detention facility.  "Pending adjudication" is the 
          period of time from when a youth is admitted to a juvenile 
          detention facility (such as a juvenile hall) and to when 
          the youth appears before a judge or commissioner to have 
          his/her case heard.  The average daily population in 
          juvenile halls and camps and other county facilities was 
          12,274, according to data from the last quarter of 2009 
          from the California Corrections Standards Authority.  

           Background  

          Exemption from counties providing the state match to draw 
          federal funds
          Medi-Cal is funded, with some exceptions, with state 
          General Fund dollars and federal matching funds.  This bill 
          requires counties electing to provide Medi-Cal benefits to 
          an individual awaiting adjudication to pay the state's 
          share of Medi-Cal expenditures and the state's 
          administrative costs for benefits.  This bill contains a 
          new provision that was not in last year's legislation that 
          creates an exception from this county-funding requirement 
          by prohibiting a county from being required to pay the 
          state's share of Medi-Cal expenditures, or the state's 
          administrative costs, for Medi-Cal benefits that the state 
          is obligated to provide pursuant to an administrative 
          action or court order that is final and no longer subject 
          to appeal.  


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          This provision is included in this bill at the request of 
          the City Attorney of the City and County of San Francisco 
          in response to litigation filed by the Office of the City 
          Attorney of San Francisco and the County of Santa Clara 
          against DHCS over the obligation of the state to provide 
          inpatient psychiatric hospital services for individuals 
          under age 21.  In that case, the Superior Court issued an 
          order stating that DHCS' policy of denying Medi-Cal 
          coverage of inpatient psychiatric hospital services to 
          youth who are in custody violates federal and state law.  
          That case is currently on appeal.  The language in this 
          bill that creates an exception to the county funding 
          requirement is not specific to inpatient psychiatric 
          hospital services and would apply to other court orders 
          that are final and no longer subject to appeal.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Assembly Appropriations Committee: 

          1. Annual increased Medi-Cal costs, likely in the millions 
             of dollars (50 percent federal/50 percent 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 percent federal/50 percent 
             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. 

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           SUPPORT  :   (Verified  8/22/11)

          Alameda County (source)
          California Council of Community Mental Health Agencies
          California Medical Association
          California Probation, Parole, and Correctional Association
          California State Association of California
          California State Sheriffs' Association
          California Youth Connection
          Chief Probation officers of California
          Children's Advocacy Institute
          Children's Hospital and Research Center Oakland
          City and County of San Francisco
          Contra Costa County Board of Supervisors
          County Alcohol and Drug Program Administrators Association 
          of California
          County Health Executives Association of California
          County of Sacramento 
          County of Santa Clara 
          Legal Services for Prisoners with Children
          Little Hoover Commission
          Mental Health Association in California
          National Association of Social Workers
          Regional Council of Rural Counties
          Urban Counties Caucus

           OPPOSITION  :    (Verified  8/22/11)

          Department of Finance

           ARGUMENTS IN SUPPORT  :    This bill is sponsored by Alameda 
          County, which writes in support that every county has an 
          obligation to tend to the health care needs of the persons 
          detained in its institutions. Alameda County writes that it 
          takes that responsibility very seriously and has developed 
          a state of the art medical clinic within its new Juvenile 
          Justice Center where every youth who is admitted to this 
          facility is given a thorough physical examination of their 
          health, dental, and mental health needs.  Alameda County 
          states this care comes at a significant cost to the county 
          - approximately $7 million annually - and this bill would 
          help the county to reduce this amount by almost half by 
          substituting federal funds for county dollars.  There would 

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          be no cost to the state General Fund because the county 
          would cover not only the state's share of cost, but also 
          the state's reasonable expenses for administering the 
          pass-through of the federal funds.  

          Alameda County argues this approach is consistent with 
          federal regulations, which allow Medicaid funds to be used 
          for a person who is detained in an institution "for a 
          temporary period of time pending other arrangements 
          appropriate to his needs."  This bill limits the 
          availability of Medi-Cal services to the period of time 
          beginning at detention until adjudication.  Finally, 
          Alameda County argues the approach in this bill is not 
          novel, as New Mexico, Pennsylvania, and Vermont have been 
          using Medicaid funds to provide health and mental health 
          services for youths in their juvenile detention facilities 
          for several years.

           ARGUMENTS IN OPPOSITION  :    The Department of Finance 
          opposes this bill for the following reasons:

          " The federal government has indicated that these costs 
            would not be eligible for federal funding.

          " The state only receives federal participation for medical 
            services provided to adults inmates in correctional 
            facilities if those services are provided in an inpatient 
            setting and provided off the grounds of the facility.  
            This bill does not require that the medical services be 
            provided off the grounds of the facility.

          " To the extent that the federal government disallows any 
            costs related to this population (such as through an 
            audit), the state would be required to reimburse the 
            federal government.  The General Fund may be at risk if 
            the state was unable to recover the funds from the 
            counties.


          CTW:mw  9/7/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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