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--- SB 1089 | Page 2 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. SB 1089 | Page 3 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 SB 1089 | Page 4 -- END --