BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:       SB 1089
          AUTHOR:        Mitchell
          INTRODUCED:    February 19, 2014
          HEARING DATE:  March 26, 2014
          CONSULTANT:    Bain

          SUBJECT  :  Medi-Cal: juvenile inmates.
           
          SUMMARY  : Makes clarifying changes to provisions requiring the  
          Department of Health Care Services to develop a process to allow  
          counties to receive federal Medicaid funds to inpatient services  
          provided to otherwise Medi-Cal eligible juvenile inmates  
          admitted as inpatients in a medical institution off the grounds  
          of the correctional facility.

          Existing law:
          1.Establishes the Medi-Cal program, which is administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals, including children ages 0 to  
            19, receive health care services.

          2.Requires DHCS to develop a process to allow counties to  
            receive any available federal financial participation for  
            acute inpatient hospital services and inpatient psychiatric  
            services provided to juvenile inmates who are admitted as  
            inpatients in a medical institution off the grounds of the  
            correctional facility, and who, but for their institutional  
            status as inmates, are otherwise eligible for Medi-Cal  
            benefits. This process was enacted by AB 396 (Mitchell),  
            Chapter 394, Statutes of 2011.

          3.Prohibits the process in 2) above from being construed to  
            alter or abrogate any obligation of the state pursuant to an  
            administrative action or a court order that is final and no  
            longer subject to appeal to fund and reimburse counties for  
            any medical services provided to a juvenile inmate.

          4.Implements the process in 2) above only in those counties that  
            elect to provide the non-federal share of the state's  
            administrative costs associated with implementation of this  
            requirement, and the non-federal share of expenditures for  
            acute inpatient hospital services and inpatient psychiatric  
            services provided to eligible juvenile inmates.
                                                         Continued---



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          This bill:
             1.   Clarifies that counties that implement AB 396 are only  
               required to provide their "pro rata portion" of the  
               non-federal share of the state's administrative costs,  
               instead of the non-federal share of the state's  
               administrative costs.

          2.Prohibits a specific section of AB 396, rather than a specific  
            subsection of that bill, from being construed to alter or  
            abrogate any obligation of the state to reimburse counties  
            under the process established by AB 396.

             3.   Limits a provision of AB 396 to the state's obligation  
               to just "reimburse" counties (rather than "fund and  
               reimburse"), and limits the services under AB 396 to "acute  
               inpatient hospital services or inpatient psychiatric  
               services" provided to a juvenile inmate, rather than the  
               broader "medical services." 

          4.States legislative intent that implementation of the  
            provisions of AB 396 will result in no increased cost to the  
            state General Fund, and alters the uncodified intent language  
            of AB 396 to reflect the change made in 2) above.

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal  
          committee.

           COMMENTS  :  
           1.Author's statement.  According to the author, in 2011, AB 396  
            (Mitchell), Chapter 394, Statutes of 2011 established a  
            voluntary program to allow the State, on behalf of counties  
            and the California Department of Corrections and  
            Rehabilitation, to draw down federal financial participation  
            under Medi-Cal for hospital inpatient services and inpatient  
            psychiatric services for Medi-Cal eligible detained juveniles  
            at no cost to the State.  Counties electing to voluntarily  
            participate would provide the non-federal share of  
            expenditures, and be paid the resulting federal funds. In the  
            case of a federal audit disallowance, the State will recoup  
            from the participating county the amount of the disallowance  
            plus any applicable interest. DHCS has expressed concerns that  
            AB 396 may subject the State's General Fund to cost pressures,  
            which was never the intent of the author or the sponsors of AB  
            396.  





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          2.Background. Under federal Medicaid law, payments for care and  
            services provided to inmates of a public institution are not  
            considered "medical assistance" (and thus are not eligible for  
            federal financial participation through Medicaid) unless the  
            inmate is a "patient in a medical institution." AB 396, SB 695  
            (Hancock), Chapter 647, Statutes of 2011, and AB 1628  
            (Committee on Budget) Chapter 729, Statutes of 2011 (the  
            corrections trailer bill) provided an opportunity to draw down  
            federal funds by establishing juvenile and adult inmate  
            eligibility for Medi-Cal when an individual is receiving  
            services at a medical facility off the grounds of the  
            correctional facility. This enables state and county savings  
            to be achieved by funding health care services with federal  
            Medicaid matching funds, rather than state and county general  
            funds. In January 2014, DHCS issued a letter to counties  
            informing them of the new Medicaid claiming options. Claims  
            under AB 396 are eligible retroactive to January 1, 2012.
          
          3.Support.  This bill is sponsored by the Los Angeles County  
            Board of Supervisors, which writes this bill is a technical  
            clean-up measure to AB 396 that contains clarifying language  
            required by DHCS to reaffirm that if counties choose to  
            participate in the program established by AB 396, they will  
            pay their pro rate share of the state's administrative costs.  
            LA County indicates DHCS requested the additional intent  
            language to further protect the state's General Fund.
          
          DHCS writes that this bill provides clean-up language to make  
            technical and clarifying changes that the scope of services  
            under the AB 396 process is limited to acute inpatient  
            hospital and inpatient psychiatric services, emphasizing the  
            Legislature's intent that the implementation of the AB 396  
            process will result in no increased cost to the state General  
            Fund and that it agrees with the sponsor's intent that each  
            county will only pay its pro-rate share of the state's  
            administrative expenses.

           SUPPORT AND OPPOSITION  :
          Support:  Los Angeles County Board of Supervisors (sponsor)
                    Department of Health Care Services
                    Urban Counties Caucus

          Oppose:   None received






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