BILL ANALYSIS Ó
SB 1161
Page 1
SENATE THIRD READING
SB 1161 (Beall)
As Amended August 18, 2014
Majority vote
SENATE VOTE :32-4
HEALTH 17-0 APPROPRIATIONS 16-1
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Bonilla, Bonta, | |Bocanegra, Bradford, Ian |
| |Chávez, Chesbro, Gomez, | |Calderon, Campos, Eggman, |
| |Gonzalez, Roger | |Gomez, Holden, Jones, |
| |Hernández, Lowenthal, | |Linder, Pan, Quirk, |
| |Nazarian, Nestande, | |Ridley-Thomas, Wagner, |
| |Patterson, Ridley-Thomas, | |Weber |
| |Rodriguez, Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Donnelly |
| | | | |
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SUMMARY : Authorizes the Department of Health Care Services
(DHCS) to seek federal approval to obtain federal financial
participation (FFP) for services provided by institutions for
mental diseases (IMD).
EXISTING LAW :
1) Establishes the Medi-Cal program, administered by DHCS,
under which qualified low-income individuals receive health
care services.
2) Establishes the Drug Medi-Cal (DMC) program, also
administered by DHCS, which provides medically necessary
substance use disorder treatment services to eligible
Medi-Cal beneficiaries.
3) Requires Medi-Cal, effective January 1, 2014, to provide
coverage for additional mental health and substance use
disorder services included in the essential health benefits
package adopted by California.
SB 1161
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4) Excludes, under federal Medicaid law, FFP for any
payments for services provided to an individual under age
65 in an IMD, which is defined as a hospital, nursing
facility, or other institution of more than 16 beds, that
is primarily engaged in providing diagnosis, treatment, or
care of persons with mental diseases, including medical
attention, nursing care, and related services. This
federal law is referred to as the "IMD exclusion."
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Likely minor costs, if DHCS chooses to exercise the authority
to pursue the specified waiver. DHCS is currently working on
a broader demonstration waiver related to coordinating
substance use services in Drug Medi-Cal and would likely fold
this in to the broader waiver.
2)A successful waiver proposal may increase utilization of
services by expanding supply, but costs are not attributable
specifically to this bill, as the services identified in the
bill are already Medi-Cal benefits pursuant to state law.
COMMENTS : According to the author, under the state's recently
approved Medi-Cal expansion, an estimated 250,000 newly eligible
Medi-Cal beneficiaries will be in need of, or will seek
substance use disorder treatment. The author states that
California's capacity for both inpatient medical detoxification
and short-term residential substance use disorder treatment
services is severely limited because of the "IMD exclusion"
which bars federal funds from being available for substance use
disorder services provided in IMDs. The author states that,
other than 11 perinatal programs providing residential substance
use disorder services under DMC, there are no DMC-licensed
residential substance use disorder facilities in California.
The author also states that capacity for inpatient medical
detoxification is equally restrictive with a majority of
hospital-based chemical dependency beds falling under the IMD
exclusion and ineligible for Medi-Cal reimbursement. According
to the author, this bill seeks to remove the barriers to
treatment caused by the IMD exclusion by authorizing DHCS to
seek a waiver to allow short-term residential treatment
facilities with more than 16 beds and short-term inpatient
medical detoxification in a hospital setting to be eligible for
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Medi-Cal reimbursement.
As a part of the implementation of federal health care reform in
2013, the DMC benefit was expanded to require Medi-Cal to
provide coverage for additional substance use disorder services.
Effective January 1, 2014, residential substance use disorder
benefits are available to all Medi-Cal beneficiaries rather than
being limited to pregnant and postpartum women. Further,
voluntary inpatient detoxification benefits are available to the
general Medi-Cal population, and not limited to beneficiaries
with a medical condition.
Current federal Medicaid law bars FFP for any services provided
to Medicaid beneficiaries under the age of 65 who receive care
in IMDs. Thus, under the broad IMD exclusion, no FFP would be
available for short-term substance use disorder services, or
short-term inpatient medical detoxification treatment provided
to Medi-Cal beneficiaries in an IMD.
Under federal law, a state which desires to make significant
changes to its Medicaid program may request a waiver from
certain federal Medicaid laws. Waivers allow states to test new
or different ways to deliver and pay for health care services in
Medicaid. This bill would authorize DHCS to request a waiver
under which FFP could be obtained for services provided in IMDs.
Centers for Medicare and Medicaid Services (CMS) has approved
waiver of the IMD exclusion for at least one other state,
Massachusetts, to allow payments for covered services furnished
to IMD patients that are not otherwise eligible for FFP.
Independent of this bill, DHCS intends to submit a waiver
request to CMS to operate the DMC program as an organized
delivery system, giving state and county officials more
authority to select quality providers to meet drug treatment
needs, and resulting in improved coordination across systems,
increased provider monitoring, and strengthened county oversight
of network adequacy, service access. In February 2014, the
Director of DHCS wrote to CMS regarding California's ability to
provide the residential substance use disorder benefit, and
requested that CMS use an interpretation of the IMD exclusion
that does not rely solely on the number of beds. DHCS requested
that CMS instead allow for flexibility to assess facilities on a
case-by-case basis rather than by number of beds alone, and
recognize that under the current interpretation of the IMD
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exclusion the number of beds available for Medi-Cal
beneficiaries would be only 10% of the state's total licensed
capacity (1,815 out of 18,155 licensed beds).
The sponsor of this bill, the County Alcohol and Drug Program
Administrators Association of California (CADPAAC) states that
the number of newly-eligible Medi-Cal clients in need of
substance use disorder treatment will significantly increase
over the next five years, but the treatment capacity in the
state falls far short of meeting this need, especially for
residential treatment facilities. CADPAAC states that the major
obstacle to expanded treatment for addiction through the
Medicaid program is the federal IMD exclusion which does not
allow drug treatment centers with more than 16 beds to bill
Medicaid for residential services provided to low-income adults.
Due to the IMD exclusion, CADPAAC states that only 10% of the
available inpatient beds in California are in facilities that
meet the federal government's restrictions, and capacity for
inpatient medical detoxification is equally limited. CADPAAC
states that this bill will remove barriers to substance use
disorder treatment and will enable the state, counties, and
providers to work together to improve access to medically
necessary services for all Medi-Cal beneficiaries in need of
substance use disorder treatment.
There is no known opposition.
Analysis Prepared by : Kelly Green / HEALTH / (916) 319-2097
FN: 0004796