BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 168


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          Date of Hearing:  January 21, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          168 (Maienschein) - As Amended January 4, 2016


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          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  








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          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  








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            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  








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            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