BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 741 (Williams) - Mental health: community care facilities ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 16, 2016 |Policy Vote: HUMAN S. 4 - 0, | | | HEALTH 8 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 741 would allow a short-term residential treatment center to be operated as a children's crisis residential center, with specified regulatory requirements. Fiscal Impact: One-time costs of about $550,000 for the development of regulations by the Department of Social Services (General Fund). The bill requires the Department to adopt regulations to specify the requirements for operating a short-term residential treatment center as a children's crisis residential center. Unknown information technology costs, likely in the low hundreds of thousands, for the Department of Social Services to modify its internal systems for licensing and regulating children's crisis residential treatment centers (General Fund). AB 741 (Williams) Page 1 of ? Ongoing costs of about $125,000 per year for the Department of Social Services to license and regulate children's crisis residential center (General Fund). Although the Department does collect licensing fees from regulated entities, those fees are not set at a level that is sufficient to fund the Department's licensing and enforcement program. No significant administrative costs are anticipated by the Department of Health Care Services. The bill requires the Department to establish Medi-Cal rates to pay for the costs of providing children's crisis residential services. However, the Department indicates that the Medi-Cal State Plan already includes children's crisis residential services and includes a methodology to pay for those services. The Department indicates that the reimbursement rate will be the same as that provided for adult crisis residential services. Unknown increase in Medi-Cal costs due to increased utilization of children's crisis residential services (General Fund, local funds, and federal funds). The intention of the bill is to provide services to children in children's crisis residential centers, rather than in psychiatric hospitals or general acute care hospitals. In those cases, there would likely be cost savings to Medi-Cal, since the reimbursement rates for crisis residential services will be lower than inpatient hospital rates. However, there is a consensus that there is a significant shortage in available psychiatric beds for children in the state. There is likely to be a significant unmet need for psychiatric inpatient services. Therefore, some of the utilization of children's crisis residential care will be in addition to those services currently being provided in hospitals, rather than a substitution for services already being provided. The size of this impact is unknown. Background: Under current law (AB 403, Stone, Statutes of 2015), the state is implementing what is referred to as the continuum of care reform effort. The purpose of this effort is to reform the system for providing residential services to foster youth, particularly those with mental health issues. Under the reform, the state is phasing out group homes for foster youth, and replacing them with short-term residential treatment facilities. While mental health services are intended to be part of the services offered by short-term residential treatment facilities, AB 741 (Williams) Page 2 of ? those facilities are not intended to be used as an alternative to inpatient psychiatric care (as are adult crisis residential centers). Proposed Law: AB 741 would allow a short-term residential treatment center to be operated as a children's crisis residential center, with specified regulatory requirements. Specific provisions of the bill would: Define "children's crisis residential center" as a short-term residential treatment facility operated specifically to divert children experiencing a mental health crisis from psychiatric hospitalization; Require the Department of Social Services to establish regulations for short-term residential treatment centers that are operated as children's crisis residential centers; Specify requirements for children's crisis residential centers - such as the maximum duration of stay, requirements for therapeutic services, operating hours, and other requirements; Require the Department of Health Care Services, in consultation with specified stakeholders, to establish Medi-Cal rates that are sufficient to reimburse for the costs of providing children's crisis residential services; Require reimbursements paid to children's crisis residential centers for board and care to be equivalent to those paid for short-term residential treatment services; Specify the criteria for a children's crisis residential center to admit residents. Related Legislation: AB 403 (Stone, Statutes of 2015) codified the continuum of care reform efforts, including establishing short-term residential treatment centers as a replacement for group homes. AB 1997 (Stone, 2016) is a technical cleanup measure to AB 403. That bill will be heard in this committee. Staff Comments: Under current law, Medi-Cal specialty mental health services and the operation of the foster care system have been AB 741 (Williams) Page 3 of ? realigned to the counties. Counties fund these programs with realignment funds and federal funds. However, pursuant to Government Code Section 30026.5, legislation enacted after September 30, 2012, that has an overall effect of increasing the costs already borne by a local agency for programs or levels of service under the 2011 Realignment shall apply to local agencies only to the extent that the state provides annual funding for the cost increase. Local agencies are not be obligated to provide programs or levels of service required by legislation above the level for which funding has been provided. To the extent that counties experience increased costs under the bill (for example, due to greater provision of crisis residential services for children who are not currently receiving residential services), counties could seek additional funding from the state to offset those increased costs. The 2016-17 Budget Act includes $30 million (General Fund and Mental Health Services Act Fund) for grants to develop capacity for children's mental health services. The implementing law does not specifically authorize those funds to be used to support new children's crisis residential centers. However, the use of that funding to support the development of children's crisis residential centers does appear to conform to the intent of the budget action. The only costs that may be incurred by a local agency relate to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state. -- END --