BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 847 (Mullin) - Mental health: community-based services
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|Version: February 22, 2016 |Policy Vote: HEALTH 9-0 |
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|Urgency: Yes |Mandate: No |
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|Hearing Date: March 7, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 847 would require the Department of Health Care
Services to develop a proposal for a specific federal
demonstration program that provides enhanced federal funding for
mental health services provided to Medi-Cal beneficiaries. The
bill would appropriate $1 million from the Mental Health
Services Fund to pay for a portion of the costs to develop the
proposal.
Fiscal
Impact:
One-time costs of $1.9 million for the Department of Health
Care Services to develop a proposal (federal funds and Mental
Health Services Fund). The Department indicates that the total
cost to prepare the proposal is $1.9 million. The Department
has received a $900,000 planning grant from the federal
government. The $1 million appropriation in the bill will
allow the Department to complete the administrative work
needed to prepare proposal for participation in the
demonstration program.
AB 847 (Mullin) Page 1 of
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Background: Under federal law, the United States Health and Human Services
Agency is authorized to implement a demonstration program in
eight states, for two years, to provide enhanced federal
financial participation for mental health services provided by
certified community behavioral health clinics to Medicaid
beneficiaries. Federal law authorizes states to apply for an
initial planning grant to pay for the costs to develop a
proposal to participate in the demonstration program. The state
applied for such a planning grant and received an award of
$900,000 in late 2015. However, the Department indicates that
the costs to develop a competitive proposal for participation in
the demonstration program will be about $1.9 million. Because
the Department did not receive sufficient federal funding to
develop a proposal, it has not undertaken any of the
administrative activities that would be necessary to develop a
proposal - such as identifying participating counties, request
client information from clinics that are likely to participate,
establish payment rates, etc.
The Mental Health Services Act (Proposition 63 of 2004) imposes
an additional 1% personal income tax on incomes over $1 million.
Most of the funding from the Mental Health Services Act is
transferred to counties to provide support for mental health
services. The Mental Health Services Act limits state
administrative spending to 5% of revenues.
Proposed Law:
AB 847 would require the Department of Health Care Services to
develop a proposal for a specific federal demonstration program
that provides enhanced federal funding for mental health
services provided to Medi-Cal beneficiaries. The bill would
appropriate $1 million from the Mental Health Services Fund to
pay for a portion of the costs to develop the proposal.
The bill includes a legislative finding that the expenditure of
funds from the Mental Health Services Fund for the purpose of
implementing the bill is consistent with the intent of the
Mental Health Services Act.
The bill contains an urgency clause.
AB 847 (Mullin) Page 2 of
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Related
Legislation: AB 861 (Maienschein) would have required the
Department of Health Care Services to apply for participation in
the federal demonstration program addressed by this bill, if the
Department had received a planning grant from the federal
government. That bill was vetoed by Governor Brown.
Staff
Comments: By appropriating $1 million from the Mental Health
Services Fund for the purposes of the bill, the bill will reduce
the funding available under the administrative cap for other
state spending priorities that are authorized under the Mental
Health Services Act.
State proposals to participate in the demonstration program are
due in October 2016. Because the Department has not taken any
action to develop a proposal since the fall of 2015, it is not
clear whether the Department will be able to develop a
competitive proposal in the remaining time available. The bill
requires the Department to develop a proposal for participation
in the demonstration project; the bill does not require the
Department to submit an application - this is intended to
provide flexibility to the Department if it cannot develop an
application that it feels would be workable for the state and
counties.
If the state applies to participate in the demonstration program
and is selected for inclusion, enhanced federal financial
participation will be available to support mental health and
substance abuse disorder services for Medi-Cal beneficiaries.
Under the program, federal financial participation for those
services would increase from 50% to 65% for the two-year
duration of the demonstration program. Because mental health
benefits for Medi-Cal beneficiaries with severe mental illness
are paid for with non-state funds (generally county realignment
funds, county Mental Health Services Act funds, and federal
funds), additional federal funding will flow to the counties,
rather than the state.
AB 847 (Mullin) Page 3 of
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