BILL ANALYSIS Ó
AB 1018
Page 1
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1018 (Cooper) - As Amended April 13, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill modifies provisions related to funding for Medi-Cal
Early and Periodic Screening, Diagnosis, and Treatment (EPSDT)
services to allow schools to provide, and be reimbursed for,
services directly. Specifically, this bill:
AB 1018
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1)Requires the California Department of Health Care Services
(DHCS) to allow county mental health plans (MHPs) to contract
with local education agencies (LEAs) to provide services for
Medi-Cal eligible pupils under EPSDT.
2)Requires DHCS, in counties where the local education agency
(LEA) does not have a contract with the county MHP, to allow
the MHP to obtain federal funds on behalf of nonpublic
agencies that contract with LEAs to provide those services, as
specified.
3)States that unless otherwise precluded by federal law, LEAs
and nonpublic agencies shall be reimbursed for specified EPSDT
services.
4)Specifies LEAs provide matching funds for the services.
5)Defines services that a county MHP may contract for, or for
which a nonpublic agency may receive federal financial
participation.
6)Requires DHCS to examine methodologies for increasing LEA
participation in the Medi-Cal program so that schools can meet
the educationally related health care needs of their pupils,
which includes simplifying the claiming processes for Medi-Cal
billing.
7)Requires DHCS to seek necessary federal approvals.
FISCAL EFFECT:
1)One-time administrative costs to DHCS (GF/federal), likely in
the hundreds of thousands of dollars, to renegotiate a federal
waiver or develop a state plan amendment, issue guidance to
clarify responsibility for provision of services, make any
necessary adjustments to contracts with county MHPs, examine
AB 1018
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methodologies to simplify billing, and set up a separate
billing and claiming structure for LEAs directly providing
EPSDT services.
2)Significant ongoing additional administrative costs to DHCS to
oversee and certify LEAs and other providers as direct
providers of EPSDT services (GF/federal). DHCS is the single
state agency responsible for certifying all federally
reimbursed Medi-Cal expenditures. Ongoing costs would depend
on how many LEAs and other providers chose to provide EPSDT
services directly.
3)If direct billing by LEAs for EPSDT services becomes
widespread, and assuming EPSDT services are paid for with
Proposition 98 dollars, it could result in significant
increased fiscal pressure on Proposition 98, proportionate to
the dollar amount of services billed. The state already
provides funding directly to counties to provide EPSDT
services to eligible children. If EPSDT services were
provided directly through schools without county MHP contracts
and Proposition 98 funds were used instead, the state would
be, in a sense, paying twice for those services. Since a
redirection of Prop 98 funds for EPSDT would leave less
funding available for other services, the bill would result in
cost pressure to Proposition 98.
COMMENTS:
1)Purpose. According to the author, there is currently no state
policy or direction on how an LEA can seek direct access to
EPSDT mental health funding. Instead, each LEA or Special
Education Local Plan Area (SELPA) must negotiate separately
with each county MHP in order to be able to provide and be
reimbursed for EPSDT mental health services for eligible
students. Each MHP determines locally whether they want the
LEA or SELPA to provide these services. The author contends
that in 2011, the state shifted 100% of the service
responsibility for the mental health special education needs
of children, but left responsibility for EPSDT services with
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counties, and did not provide schools access to EPSDT funding.
2)Federal IDEA requirements on schools. The federal Individuals
with Disabilities Education Act (IDEA) entitles all children
with disabilities to a free, appropriate public education that
prepares them to live and work in the community, including
mental health treatment services necessary to benefit from
their education. Pursuant to IDEA, LEAs define the services
students with disabilities need in order to benefit from their
education through an individualized education program (IEP).
An IEP can include mental health services.
3)County Mental Health and EPSDT. The 2011 realignment left
counties fully responsible for providing and funding specialty
mental health services for Medi-Cal eligible individuals.
Through contracts with the state DHCS, and pursuant to a
specialty mental health waiver with the federal government,
county MHPs are responsible for funding and providing EPSDT
mental health services to Medi-Cal eligible children who meet
clinical criteria. EPSDT is a broad set of services available
to Medi-Cal eligible children, but the mental health portion
of EPSDT is a smaller set of services which include group
therapy, family therapy, case management, crisis counseling,
medication, and other medically necessary services for
children with serious mental illness.
County MHPs fulfill EPSDT obligations through direct service
provision and contracts. Many county MHPs contract with LEAs
or Special Education Local Plan Area (SELPAs) to provide
certain services. County MHPs pay 100% of the costs of
services and submit reimbursement claims to the federal
government, through DHCS, to claim federal financial
participation (FFP). By claiming FFP, counties can be
reimbursed for about 50% of their costs. Counties fund their
portion of the cost of these services through a combination of
2011 realignment funding, 1991 realignment funding, and
Proposition 63 funds.
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4)Recent Shifts of Responsibility. The roles and
responsibilities of county mental health departments and LEAs
to provide mental health services to students have changed
over the years. Prior to 1984, school districts were
responsible for providing all special education services to
children. In 1984, the Legislature enacted AB 3632, which
transferred responsibility for providing mental health
services to special education pupils from school districts to
county mental health departments. The intent was to build on
counties' existing expertise, and provide collaboration
between schools and public mental health. AB 3632 services
were deemed a state-reimbursable mandate.
In 2010, during the state's recent fiscal crisis, state
funding for AB 3632 was vetoed and the mandate was suspended.
AB 114 (Budget Committee), Chapter 43, Statutes of 2011,
repealed provisions of AB 3632, and realigned responsibility
for mental health services back to school districts. The
federal IDEA now serves as the statutory framework for the
provision of required services. The California Department of
Education (CDE) provides guidance to LEAs on numerous aspects
of this transition, including options LEAs have for claiming
federal matching funds for qualifying services provided to
Medi-Cal eligible children.
The issue here appears to be when there is overlap between
IDEA and EPSDT, that is, when students are Medi-Cal eligible,
eligible for specialty mental health services through a county
mental health plan, and, in absence of Medi-Cal eligibility,
would be provided services pursuant to IDEA by the school. In
most counties, there appear to be successful partnerships to
provide needed services to these children, which often involve
school-based delivery of care.
5)LEA Billing Option Program. There is already an established
mechanism through which LEAs can be reimbursed for providing
certain Medi-Cal services on a fee-for-service basis to
Medi-Cal eligible children. Through the LEA Billing Option
Program, LEAs pay for the services with local funds, then file
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claims for federal reimbursement. LEAs are generally
reimbursed 50 cents for every dollar spent, minus funds
withheld for DHCS administrative costs. Thus, the program is
fully funded with a combination of local and federal funds;
there is no GF cost.
LEAs are only able to submit claims for services allowable
under the federally approved State Plan for the LEA Medi-Cal
Billing Option Program. There is some crossover with the list
of services provided through EPSDT. EPSDT services that are
also reimbursable through this program include psychology and
counseling, case management, mental health assessments,
nursing services, and other health services.
6)Opposition. The California Council of Community Mental Health
Agencies states in opposition that this bill would require the
state to seek federal approval to expand the scope of the
school Medi-Cal billing option for LEAs to provide all
services covered by the EPSDT county mental health program.
According to the opposition, this is the wrong approach to
this issue, as it ignores the need for a partnership between
counties and schools. Moreover, it is not likely to be
successful in getting federal approval as it is inconsistent
with the managed care approach of the Medi-Cal county mental
health system. The opposition states that a better approach
is to ensure that counties fulfill their responsibilities to
provide services to Medi-Cal enrolled students under the EPSDT
program and partner with schools to identify and serve all
youth who may need such services.
7)Related Legislation.
a) AB 1025 (Thurmond), pending in Assembly Education,
requires CDE to establish a three-year pilot program to
encourage inclusive practices that integrate mental health,
special education, and school climate interventions
following a multitiered framework.
b) AB 1133 (Achadjian), pending in Assembly Health, makes
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technical changes to existing law regarding grants to LEAs
to pay the state share of costs of providing school-based
early mental health intervention and prevention services to
eligible students.
8)Prior Legislation.
a) AB 114 (Committee on Budget), Chapter 43, Statutes of
2011, a companion measure to the 2011-12 Budget bill,
relieved county mental health departments of the
responsibility to provide mental health services to
students with disabilities (AB 3632 program) and
transferred that responsibility to school districts.
b) AB 2212 (Gray) of 2014 was substantially similar to this
bill and was held on the Suspense File of this committee.
9)Staff Comments. Through 2011 realignment, the state has
completed the realignment of EPSDT services for Medi-Cal
eligible children to counties, providing them both the
responsibility and funding for these services. In many parts
of the state, LEAs have entered contracts or MOUs to ensure
appropriate services are provided to students who need them.
It appears this bill intends to allow LEAs who are not able to
secure contracts from MHPs to provide EPSDT services to bypass
county MHPs, who are statutorily responsible for providing and
funding such services. This raises the following issues:
a) Paying twice? The state is already providing funding
directly to counties to provide EPSDT services. If the
state were to allow LEAs to use Proposition 98 funding to
directly draw down federal reimbursement to provide EPSDT
services at the discretion of the LEA and outside of the
county MHP structure, the state may be double-paying for
those services. In effect, there would be an increase in
Proposition 98 funding of EPSDT services without a decrease
in county funding for such services. The net effect would
be to reduce the funding available for other non-EPSDT
Proposition 98 activities, increasing cost pressure on
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Proposition 98.
b) Definition of the Problem and Solution? Overall, from a
state fiscal perspective, it makes sense to maximize
federal reimbursement for EPSDT services provided to
students with serious mental illness. If schools are
directly providing or contracting for such services because
of the federal IDEA mandate, and are not under contract
with a county MHP, Proposition 98/GF is paying 100% of the
costs of those services, which seems suboptimal. However,
it should be noted that (1) not all mental health services
provided by schools in order to meet IDEA requirements
would be federally reimbursable, either because they are
provided to children who are not Medi-Cal eligible or
because the services are not covered EPSDT benefits, and
(2) there are significant bureaucratic strings attached to
claiming FFP, including administrative and audit
requirements. According to the existing law structure, in
an ideal scenario that is to the mutual benefit of the
child requiring services, the school, and the state General
Fund, anything that is an EPSDT service provided to a
Medi-Cal eligible student should be provided through the
coordinated structure of the county MHP and in a manner
that works well for the student. Often, this will be
school-based delivery of care. If there are local
conditions where county MHPs are not making appropriate
arrangements for children to get the care they are entitled
to, a better approach may be to provide oversight of those
county MHPs, or create a formal mechanism by which schools
can raise and resolve issues relating to the adequacy of
care, with state mediation and intervention if necessary.
If, on the other hand, the problem in question is that the
schools simply prefer to be the providers of these
services, but the county MHPs find that a different
mechanism of delivering the care is preferable, that seems
more an issue of local coordination. For better or worse,
the state has put those choices into the hands of counties
through realignment. Finally, because of the dual mandate
and the overlap in eligibility for mental health services
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through IDEA and EPSDT, it may be worth considering
clarifying the responsibility of schools versus county MHPs
to provide services for students entitled to those services
through both IDEA and EPSDT, including who is the primary
payer and who is the secondary payer, either through
statute or through DHCS technical assistance or guidance.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081