BILL ANALYSIS Ó AB 168 Page 1 Date of Hearing: January 21, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 168 (Maienschein) - As Amended January 4, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the Department of Health Care Services (DHCS) to apply for, and places restrictions on, a federal demonstration program that offers enhanced federal matching funds for Medi-Cal behavioral health services offered through clinics that meet certain standards. Specifically, the bill specifies counties shall not be selected to participate in the demonstration program, unless they redirect funds freed up by the higher federal matching rate to increase housing opportunities for individuals with severe mental illnesses. It also requires stakeholder engagement to AB 168 Page 2 estimate unmet need for services, and makes related findings and declarations. FISCAL EFFECT: Negligible state fiscal effect. The state intends to apply to participate in the demonstration project. If California is selected as a demonstration state, this bill may indirectly affect the amount of local dollars spent to provide housing for mentally ill individuals, though the extent and magnitude of any such impact is unknown. It is unclear if the requirement for counties to redirect a portion of savings to providing housing would affect California's chances for being selected as a demonstration state. COMMENTS: 1)Purpose. The purpose of this bill is to ensure DHCS applies for the specified federal demonstration project, and to ensure that if money is freed up by increased federal funding for Medi-Cal behavioral health services through the project, that a portion of local savings be redirected to housing homeless mentally ill people. The author asserts savings to the counties will free up Proposition 63 funds and other county mental health funds that are now expended on hospital care. 2)Background. Federal law authorizes a two-year state demonstration project, whereby up to eight participating states develop processes to designate and reimburse certified community behavioral health clinics (CCBHCs) that meet certain standards. Twenty-four states, including California, were awarded planning grants that allow them to apply for AB 168 Page 3 participation in the two-year demonstration, which begins in 2017. California applied for a $2 million planning grant and was awarded less than $1 million. Stakeholders, including counties, advocates, the administration and the Legislature are currently discussing how to ensure California's grant is competitive, despite having fewer federal resources than requested to develop the demonstration project application. DHCS's application for the planning grant was made in collaboration with the County Behavioral Health Directors Association (CBHDA) of California, who represent the state's key county partners in the delivery of Medi-Cal behavioral health services to seriously mentally ill enrollees. These services are largely delivered and managed by counties, and local funds pay for the Medi-Cal non-federal share of cost. If California is selected as one of the eight participating states, federal matching funds for the specified behavioral health services would be available at a very favorable federal matching rate of at least 88% for two years. 3)Related Legislation. AB 847 (Mullin), pending in the Senate Appropriations Committee, is substantially similar to this bill. 4)Previous Legislation. AB 861 (Maienschein) of 2015 was similar to this bill, but required DHCS to apply for the related planning grant (which DHCS received in October 2015). AB 861 was vetoed with a message stating, "This bill would require the DHCS to mandate counties, as a condition of participation in a federal behavioral health demonstration program, to redirect a portion of any local savings to increasing housing opportunities for individuals with severe mental illness. The department has not been awarded the federal grant nor approved as one of eight states to participate in the federal demonstration program. As such, this bill is premature." It is unclear whether this bill AB 168 Page 4 addresses the veto message in AB 861. On the one hand, the department has still not yet been selected to participate in the demonstration project, and stakeholder discussions and other planning grant activities are currently underway. On the other hand, this is the only appropriate time to consider legislation with an intent to inform the design of the grant application, which will be submitted this year. The selection of the state as a participant in the demonstration project is likely to take place late this year, and the demonstration project would commence in January 2017. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081