Amended in Senate April 10, 2014

Amended in Senate April 2, 2014

Senate Bill No. 1161

Introduced by Senator Beall

February 20, 2014

An act to add Section 14124.27 to the Welfare and Institutions Code, relating to Medi-Cal.

LEGISLATIVE COUNSEL’S DIGEST

SB 1161, as amended, Beall. Drug Medi-Cal.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law prohibits federal financial participation for care or services provided to patients in an institution for mental diseases (IMD). Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal) under which the department is authorized to enter into contracts with counties for various drug treatment services for Medi-Cal recipients, or is required to directly arrange for these services if a county elects not to do so.

This bill would require the department to seek a specified waiver of the IMD exclusion under Drug Medi-Cal to provide short-term residential treatment in facilities with a bed capacity in excess of 16 beds and short-term inpatient medical detoxification in a hospital setting.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

(a) The Legislature finds and declares all of the
following:

(1) The federal Patient Protection and Affordable Care Act
(PPACA) (Public Law 111-148), as amended by the federal Health
Care and Education Reconciliation Act of 2010 (Public Law
111-152), offers previously uninsured Californians unprecedented
access to health services, including mental health and substance
use disorder services.

(2) In 2013, the Legislature passed Assembly Bill 1 and Senate
Bill 1 in the 2013-14 First Extraordinary Session, which expanded
Medi-Cal coverage to low-income adults with incomes at or below
138 percent of the federal poverty level who were not previously
eligible, established the Medi-Cal benefit package for this
expansion population, and required the Medi-Cal program to cover
essential health benefits contained in PPACA, which are now
included in the state plan.

(3) It is estimated that 250,000 Californians newly eligible for
Medi-Cal are in need of, or are seeking, substance use disorder
treatment.

(4) Substance use disorder treatment often requires medical
detoxification and residential treatment services, services that have
been approved under California’s Medi-Cal expansion under
PPACA.

(5) The federal exclusion for institutions for mental diseases
(IMD) only permits residential care for substance use disorder in
facilities with 16 beds or fewer and medical detoxification only in
a general acute hospital, making both services inaccessible to
Medi-Cal and Drug Medi-Cal beneficiaries.

(6) Capacity for both medical detoxification and residential
treatment is severely limited in California in settings in compliance
with the federal exclusion for IMD.

(7) Medical detoxification in a general acute care hospital is,
by far, the most expensive method to provide detoxification
treatment.

(8) According to a letter from the Director of Health Care
Services to the federal Centers for Medicare and Medicaid Services,
only 21 percent of California’s beds are in facilities with a capacity
of 16 and under. Furthermore, other than 11 perinatal programs,
there are no Drug Medi-Cal licensed residential substance use
disorder facilities in California. Therefore, California is severely
limited in providing the expanded substance use disorder residential
treatment benefits as provided for by the Medi-Cal expansion.

(9) The Commonwealth of Massachusetts successfully included
IMD expenditure authority in its Section 1115 waiver. California
has a similar need for IMD expenditure authority.

(10) The State Department of Health Care Services has the
authority, subject to federal approval, to seek a Section 1115
waiver.

(b) It is the intent of the Legislature to expeditiously expand
statewide capacity for mental health and substance use disorder
treatment services for all Californians newly eligible for health
care services under the expansion of Medi-Cal eligibility who are
in need of or currently seeking treatment.

SEC. 2.  

Section 14124.27 is added to the Welfare and
Institutions Code, immediately following Section 14124.26, to
read:

14124.27.  

(a) The department shall seek a waiver of federal
law under Section 1115 of the federal Social Security Act (42
U.S.C. Sec. 1315) to receive begin delete enhanced end delete federal financial
participation under the Drug Medi-Cal program in accordance with
this section.

(b) The department shall seek a waiver of the institution for
mental diseases (IMD) exclusion in Section 1396d(a)(29)(B) of
Title 42 of the United States Code to provide short-term residential
treatment in facilities with bed capacities in excess of 16 beds, 30
to 90 days maximum, with an average length of stay of 60 days,
and short-term inpatient medical detoxification in a hospital setting,
including, but not limited to, free-standing begin insert acute end insert psychiatric and
chemical dependency recovery hospitals begin delete , for three to seven days
maximum, with an average length of stay of five days end delete .

(c) This section shall be implemented only to the extent federal
approval is obtained and to the extent that federal financial
participation is available.