BILL ANALYSIS Ó
SB 1009
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SENATE THIRD READING
SB 1009 (Budget and Fiscal Review Committee)
As Amended June 25, 2012
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
SENATE VOTE :Vote not relevant
SUMMARY : Contains necessary statutory changes to: 1) achieve
savings assumed in the 2012 Budget Act for the Departments of
Health Care Services, Mental Health, Public Health, and Social
Services; 2) implement the elimination of the Department of
Mental Health; and, 3) implements the 2011 realignment of mental
health services. Specifically, this bill :
1)Transfers functions from the Department of Mental Health (DMH)
to other state departments reflecting the elimination of this
department.
2)Eliminates and modifies most duties of DMH since it is being
restructured into the Department of State Hospitals whose
functions and duties are articulated in AB 1470 trailer bill
legislation.
3)Transfers most remaining state administrative functions for
community-based mental health to the Department of Health Care
Services (DHCS) effective July 1, 2012, including Medi-Cal
specialty mental health services.
4)Transfers licensing and certification responsibilities to
other departments. Transfers licensing of Mental Health
Rehabilitation Centers and Psychiatric Health Facilities to
the Department of Social Services. Transfers certification of
Skilled Nursing Facilities with Special Treatment Programs,
Community Residential Treatment Systems, also known as Social
Rehabilitation Programs, and Community Treatment Facilities to
DHCS.
5)Recasts state and local specialty mental health services
provided through Medi-Cal. Under existing law, County Mental
Health Plans administer Medi-Cal Specialty Mental Health
Program services at the local level, including the Early and
Periodic Screening, Diagnosis and Treatment Program (EPSDT).
This arrangement operates under its own distinct federal
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Medicaid Waiver, which is administered by the DHCS. This bill
modifies statute by making the following key changes to these
provisions of law:
a) Provides for DHCS to contract with Mental Health Plans,
which may include individual counties, counties acting
jointly, or an organization or non-governmental entity
determined by DHCS to meet mental health plan standards.
It provides that if a county decides not to contract with
DHCS, or is unable to meet standards set by DHCS, the
county is to inform the department. Requires DHCS to
ensure that specialty mental health services are provided
to Medi-Cal beneficiaries and authorizes DHCS to contract
with another entity in order to provide this assurance of
service delivery. In addition, if a county does not
contract with the state for specialty mental health
services, then the DHCS shall work with the Department of
Finance (DOF) and the State Controller to sequester funds
from any county that is unable or unwilling to contract as
specified.
b) Requires, if a county does not contract with the state,
DHCS to notify the DOF, the fiscal and policy committees of
the Legislature and the State Controller of the amounts to
be sequestered from specified Realignment accounts.
c) Requires Mental Health Plans to be financially
responsible for ensuring access and a minimum required
scope of benefits and services to Medi-Cal beneficiaries
who are residents of that county regardless of where the
beneficiary resides. The same definition of medical
necessity is to be used and the minimum scope of benefits
offered by each Mental Health Plan must be the same, except
to the extent that prior federal approval is received and
is consistent with state and federal laws.
d) Specifies that Mental Health Plans shall provide
Medi-Cal specialty mental health services to eligible
Medi-Cal beneficiaries, including both adults and children,
including services provided under EPSDT.
e) Expresses the intent of the Legislature to establish a
standard set of guidelines that governs the provision of
Medi-Cal specialty mental health services at the local
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level, consistent with federal law and consistent with
guidelines established by DHCS. It further is the intent
that Mental Health Plans be developed and implemented
regardless of whether other systems of Medi-Cal managed
care are implemented and that Welfare and Institutions
(W&I) Code Sections 14681 to 14685, inclusive, shall not be
construed to mandate the participation of counties in
Medi-Cal managed mental health plans.
f) Declares that W&I Code Section 14685, regarding a
county's first right of refusal to serve as a mental health
plan, be repealed on November 7, 2012, if Section 36 has
been added to Article XIII of the California Constitution
as of that date.
g) Expresses the intent of the Legislature to develop a
performance outcome system for EPSDT that will improve
outcomes at the individual and systems levels and will
inform fiscal decision making related to the purchase of
services. Requires DHCS, in collaboration with the
California Health and Human Services Agency, and in
consultation with the Mental Health Services Oversight and
Accountability Commission, to create a plan for a
performance outcome system for EPSDT mental health
services. By no later than September 1, 2012, a
stakeholder advisory committee shall be convened for the
purpose of developing this plan. This bill specifies
objectives for this purpose and requires DHCS to provide a
plan, including milestones and timelines for EPSDT mental
health outcomes by no later than October 1, 2013.
h) Requires all Mental Health Plans to comply with federal
laws, regulations, guidelines, standards, and requirements
specified in the State Medicaid Plan, federal waiver, and
mental health plan contract.
i) Provides for counties to set aside funds for
self-insurance, audit settlement, and statewide program
risk-pools. Requires counties to assume all responsibility
and liability for administration of these mechanisms.
j) Provides for the DHCS to propose a rulemaking package
consistent with DHCS's appeals process (including for
Mental Health Plans and subcontractors) that is in effect
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on July 1, 2012, by no later than the end of the 2013-14
fiscal year.
aa) Requires Mental Health Plans to use DHCS's fiscal
intermediary of the Medi-Cal Program for all claims
processing for inpatient psychiatric hospital services as
specified.
bb) Requires DHCS to consult with the California Mental
Health Directors Association in February and September of
each year to obtain data and methodology necessary to
forecast future fiscal trends in the provision of Medi-Cal
Specialty Mental Health services, including EPSDT. This is
to include a separate presentation of data and methodology
to forecast trends in the provision of EPSDT services to
estimate annual EPSDT related costs and other information.
cc) Requires DHCS to consult with staff of the Legislature,
counties, providers, and other stakeholders in the
development of State Plan amendments or federal waivers.
dd) Modifies federal audit exceptions against the state
regarding federal funds expended by counties in order to
conform to AB 1480 regarding the realignment superstructure
and specifies which realignment accounts can be used for
this purpose.
ee) Provides for specified realignment accounts to be used
for certified public expenditures to be consistent with
federal Medicaid requirements.
6)Implements 2011 mental health realignment. In 1991,
legislation realigned the fiscal and administrative
responsibilities for specialty mental health care. The intent
of realignment was to provide a more stable funding source for
community-based services, to shift program accountability to
the local level, and to make services more client-centered and
family-focused. The 1991 realignment revenues, funded by an
increase in the sales tax and in vehicle license fees, are
collected by the state and allocated to various accounts and
subaccounts in the Local Revenue Fund. The Mental Health
Subaccount is the principal fund that contains revenues for
the provision of local mental health services. Realignment
revenues are expended by counties to provide specialty mental
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health services to low-income individuals not eligible for
Medi-Cal, and it serves as the non-federal match for Medi-Cal
specialty mental health services.
7)Recasts certain technical funding provisions from 1991-92
Realignment, and revises provisions from 2011 Realignment,
which are consistent with statutory changes contained in AB
1480 regarding the realignment superstructure.
8)Makes other conforming changes, including the following:
a) Provides for broader stakeholder discussions in the
development of standards and guidelines for local quality
assurance activities as specified in Section 14725 of W&I
Code.
b) Adds consultation with California Mental Health
Directors Association, California Mental Health Planning
Council, and the Mental Health Services Oversight and
Accountability Commission to provide for increased
transparency in mental health policymaking and to conform
with AB 1467, the Omnibus Health trailer bill where
applicable.
c) Continues the performance contracting process as a
conforming action to AB 1467, the Omnibus Health trailer
bill.
d) Recasts the Patient Rights Program by utilizing a joint
contracting process DHCS and the new Department of State
Hospitals.
e) Modernizes terminology in the statute by using the
reference "individuals with mental illness" in lieu of
terms such as "chronically mentally disordered patients."
f) Provides DHCS with regulation authority where
applicable.
g) Updates certain reporting requirements for DHCS and the
Department of State Hospitals.
h) Deletes un-operative provisions of statute that are not
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in effect or would become inoperable in the future.
9)Contains an appropriation allowing this bill to take effect
immediately upon enactment.
Analysis Prepared by : Andrea Margolis / BUDGET / (916)
319-2099
FN: 0004192