BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 695| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 695 Page 2 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 CONTINUED SB 695 Page 3 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. CONTINUED SB 695 Page 4 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. CONTINUED SB 695 Page 5 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. CONTINUED SB 695 Page 6 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 CONTINUED SB 695 Page 7 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 **** END **** CONTINUED SB 695 Page 8 CONTINUED