BILL ANALYSIS Ó
AB 1432
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Date of Hearing: April 7, 2015
ASSEMBLY COMMITTEE ON HEALTH
Bonta, Chair
AB
1432 (Bonta) - As Amended March 26, 2015
SUBJECT: Drug and alcohol abuse programs.
SUMMARY: Requires the State Department of Health Care Services
(DHCS) to submit an application to the federal Centers for
Medicare and Medicaid Services (CMS) for a waiver to implement a
demonstration project to accomplish specified goals and requires
DHCS to submit an implementation plan to the Legislature prior
to implementing an approved waiver. Specifically, this bill:
1)Requires DHCS to submit an application to CMS for a waiver to
implement a demonstration project that does all of the
following:
a) Furthers the delivery of high-quality and cost-efficient
care for communities and consumers with substance abuse
disorders and co-occurring disorders;
b) Ensures the long-term viability of the delivery system
following the expansion of Medi-Cal eligibility under the
federal Patient Protection and Affordable Care Act (ACA);
and,
c) Continues California's momentum and successes in
innovation achieved under the 2010 "Bridge to Reform"
Waiver.
2)Requires DHCS to consult with interested stakeholders and the
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Legislature in developing the waiver application.
EXISTING
LAW:1)
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income persons receive health care
benefits. Medi-Cal is California's version of the federal
Medicaid program and is jointly funded by the state and
federal government.
2)Establishes the Drug Medi-Cal program (DMC), which provides
substance use disorder services to Medi-Cal recipients.
3)Allows DHCS to enter into contracts with counties for the
provision of DMC services. Requires DHCS to contract for
services in the county to ensure beneficiary access, if a
county declines to contract with DHCS.
4)Requires DHCS to adopt emergency regulations governing the DMC
program by July 1, 2014.
FISCAL EFFECT: This bill has not yet been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. The author states that an important
goal of the new DMC Organized Delivery System demonstration
project authorized by the amendment to the Section 1115 Waiver
will be to maximize mental health and substance abuse disorder
services for Californians. This bill is necessary to ensure
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that the provisions of the final DMC Organized Delivery System
demonstration project amendment have the legislative authority
necessary to be implemented.
2)BACKGROUND. DMC services are reimbursed on a fee-for-service
basis at rates set by the state, and are not provided through
Medi-Cal managed care plans. These services are carved out
from the regular Medi-Cal program: they are delivered by a
specialized system of providers certified by the state rather
than through participating physicians or health plans. DMC
services include outpatient drug free services, which consist
mostly of group counseling and some limited individual
counseling for persons in crisis; narcotic treatment programs,
which provide methadone replacement therapy; intensive
outpatient services; and, residential services. There are
about 800 active DMC providers in the state.
a) Federal Section 1115 Waivers. Medicaid (known as
Medi-Cal in California) is a joint federal-state program to
provide health coverage to low-income individuals. Section
1115 of the federal Social Security Act (Act) gives the
Secretary of the Department of Health and Human Services
(HHS) authority to waive provisions of major health and
welfare programs authorized under the Act. This includes
certain federal Medicaid requirements in any experimental
pilot or demonstration project which, in the judgment of
the HHS Secretary, is likely to assist in promoting the
objectives of Medicaid. In addition, Section 1115 also
allows states to use federal Medicaid funds to reimburse
for costs in ways that are not otherwise allowed under
federal Medicaid law.
Section 1115 waivers are approved at the discretion of the
Secretary of HHS through negotiations between a state and
CMS for projects that the Secretary determines promote
Medicaid program objectives. Section 1115 waivers are
generally approved for a five-year period and then must be
renewed. Although not required by statute or regulation,
longstanding federal administrative policy has required
waivers to be "budget neutral" for the federal government,
meaning that federal spending under a waiver must not be
more than projected federal spending in the state without
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the waiver. The DMC Organized Delivery System Program
(ODS) waiver was submitted as an amendment to the
California Section 1115 Bridge to Reform Waiver.
b) Bridge to Reform Waiver. California's existing Section
1115 "California Bridge to Reform Demonstration" Waiver is
a five-year demonstration of health care reform initiatives
that was projected to provide an additional $10 billion in
federal funds over the lifetime of the waiver. The waiver
prepared the state for successful implementation of health
care reform through an early expansion of Medicaid, and
tested innovations in health care support for safety net
providers. California is currently in the fourth year of
this waiver, which began November 1, 2010 and expires
October 31, 2015. Under the current waiver, California is
required to submit an extension request no later than six
months prior to the expiration date of the current
demonstration. California also operates its Medi-Cal
managed care delivery system under this federal waiver.
c) DMC Waiver Amendment. On November 21, 2014, DHCS
submitted a proposal to amend the Special Terms and
Conditions the California Section 1115 Bridge to Reform
Waiver. California's DMC Organized Delivery System
(DMC-ODS) 1115 demonstration waiver provides a continuum
of care modeled after the American Society of Addiction
Medicine Criteria for substance use disorder treatment
services.
The waiver amendment will make improvements to the DMC
service delivery system, will create more local control
and accountability in selection of high quality
providers, will improve local coordination of case
management services, will ensure implementation of
evidence based practices in substance abuse treatment,
and will increase coordination with other systems of care
including physical health. The DMC-ODS waiver amendment
will demonstrate how organized substance use disorder
care increases the success of DMC beneficiaries while
decreasing other system health care costs. Participation
for providing services under this waiver is voluntary;
eight to 12 counties are expected to initially opt-in to
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waiver participation.
This waiver amendment would allow the state to extend the
DMC Residential Treatment Service, as an integral aspect
of the continuum of care, to additional beneficiaries.
Historically, the Residential Treatment Service was only
available to pregnant/postpartum beneficiaries in
facilities with a capacity of 16 or less beds. This
waiver will create a Residential Treatment Service
operable in facilities with no bed capacity limit.
3)SUPPORT. The California College and University Police Chiefs
Association state that the public safety challenges that take
place disproportionately in their jurisdictions, primarily
institutions of higher education, could be improved by
enhanced substance abuse program access.
4)RELATED LEGISLATION. AB 72 (Bonta and Atkins) requires DHCS
to submit an application to CMS for a waiver to implement the
provisions of the state's Section 1115 Waiver Demonstration
entitled "Medi-Cal 2020: Key Concepts for Renewal." AB 72 is
pending in the Assembly Health Committee.
5)PREVIOUS LEGISLATION.
a) AB 1967 (Pan), Chapter 461, Statutes of 2014, requires
DHCS, if it commences or concludes an investigation of a
DMC provider, to notify counties that contract with the
provider.
b) SB 1529 (Alquist), Chapter 797, Statutes of 2012,
revises screening, enrollment, disenrollment, suspensions,
and other sanctions for fee-for service Medi-Cal providers
and suppliers to conform to the ACA.
c) SB 857 (Speier), Chapter 601, Statutes of 2003, makes
numerous changes to the Medi-Cal program intended to
address provider fraud, including establishing new Medi-Cal
application requirements for new providers, existing
providers at new locations, and providers applying for
continued enrollment.
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REGISTERED SUPPORT / OPPOSITION:
Support
California College and University Police Chiefs
Opposition
None on file.
Analysis Prepared
by: Paula Villescaz / HEALTH / (916) 319-2097