BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    SB 296    
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          |AUTHOR:        |Cannella                                       |
          |---------------+-----------------------------------------------|
          |VERSION:       |April 7, 2015                                  |
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          |HEARING DATE:  |April 15, 2015 |               |               |
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          |CONSULTANT:    |Reyes Diaz                                     |
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           SUBJECT  :  Medi-Cal: specialty mental health services:  
          documentation requirements.

           SUMMARY  :  Requires the Department of Health Care Services (DHCS) to  
          develop a single set of documentation requirements, with  
          consultation from various entities as specified, for the  
          provision of specialty mental health (SMH) services by January  
          1, 2017, for use commencing July 1, 2017. Requires DHCS to  
          update the documentation requirements no less than every two  
          years, unless more frequent updating is required, as specified.  
          Prohibits counties from requiring additional documentation for  
          SMH services, unless required by funding sources. 

          Existing law:
          1.Establishes the Medi-Cal program, administered by DHCS, under  
            which qualified low-income individuals receive health care  
            services.

          2.Requires DHCS to create a standardized set of documentation  
            standards and forms in order to facilitate the receipt of  
            medically necessary SMH services by a foster child who is  
            placed outside of his or her county of original jurisdiction.
          
          This bill:
          1.Requires DHCS to consult with counties, providers, national  
            experts, other states, and other stakeholders to develop a  
            single set of service documentation requirements for the  
            provision of SMH services.

          2.Requires the documentation requirements to: a) minimize time  
            and paperwork required of counties and providers, consistent  
            with federal standards and practices of other states; b)  
            eliminate duplicative or outdated requirements; and c) reflect  







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            outcome reporting requirements developed pursuant to the  
            performance outcome system for Early and Periodic Screening,  
            Diagnosis, and Treatment (EPSDT) mental health services.

          3.Requires DHCS to complete the documentation requirements by  
            January 1, 2017, for use commencing July 1, 2017, and to  
            update the documentation requirements no less than every two  
            years through a stakeholder process, unless changes in the  
            Medicaid state plan or other federal rules require more  
            frequent updating.

          4.Prohibits a county from requiring additional documentation,  
            after DHCS adopts the standard requirements, for SMH services  
            that go beyond DHCS's requirements unless it is necessary for  
            counties to comply with requirements from funding sources that  
            are used to pay for the services.

          5.Makes findings and declarations about the amount of time  
            paperwork documentation takes in the state because counties  
            have added documentation requirements based on the fear that  
            state audits will result in billing disallowances. States the  
            necessity for DHCS to develop a single set of documentation  
            requirements to limit audit disallowances.

           FISCAL  
          EFFECT  :  This bill has not been analyzed by a fiscal committee.

           COMMENTS  :
          1.Author's statement. According to the author, SB 296 is  
            necessary because it would get rid of the concern from mental  
            health officials and the community agencies they contract with  
            that the state's interpretation of the guidelines in audits  
            might disallow some services if the additional documentation  
            were not included. While the state guidelines on billing are  
            not much different from other states, counties have added so  
            many requirements that it takes up to 20 minutes of  
            documentation to prepare progress notes on things like  
            psychotherapy, while in other states it takes five minutes.  
            This costs manpower and money to the state and counties. SB  
            296 would end this pattern by creating a single set of  
            documentation requirements developed by the state, in  
            consultation with counties and providers, that limits audit  
            disallowances to circumstances clearly spelled out in the  
            requirements, and is designed to be the minimum documentation  
            requirements necessary to comply with federal law and other  








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            applicable state laws. 

          2.CMS requirements for reimbursement. Behavioral health services  
            must meet specific requirements for reimbursement. Documented  
            services must: 

               a.     Meet that state's Medicaid program rules;
               b.     To the extent required under state law, reflect  
                 medical necessity and justify the treatment and clinical  
                 rationale (each state adopts its own medical necessity  
                 definition);
               c.     To the extent required under state law, reflect  
                 active treatment;
               d.     Be complete, concise, and accurate, including the  
                 face-to-face time spent with the patient (for example,  
                 the time spent to complete a psychosocial assessment, a  
                 treatment plan, or a discharge plan); 
               e.     Be legible, signed, and dated; 
               f.     Be maintained and available for review; and, 
               g.     Be coded correctly for billing purposes. 

            Centers for Medicare and Medicaid Services (CMS) states that a  
            reason for documenting medical services is to comply with  
            federal and state laws, which require proper support for  
            billed claims. In addition, CMS states that documentation done  
            well can help protect a behavioral health practitioner from  
            billing disallowances. 

          1.State SMH service reimbursement. In order to receive  
            reimbursement for SMH services, the current contracts that  
            counties have with the state require medical necessity to be  
            met for the service as documented on an assessment with an  
            International Classification of Diseases or Diagnostic and  
            Statistical Manual of Mental Disorders diagnosis, a treatment  
            plan with objectives/interventions and client participation,  
            and progress notes with the intervention and response of the  
            client. According to the County Behavioral Health Directors  
            Association of California (CBHDAC), counties, as the  
            contracting entity with mental health plans (MHPs), need to  
            have the ability to impose greater documentation to meet  
            requirements based on: 

               a.     The need for authorization or the need for service; 
               b.     Risk, (e.g. the Los Angeles County Blue Ribbon  
                 Commission mandate to assess for self-harm vulnerability  








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                 risk); 
               c.     The need for ongoing flex funds for a particular  
                 client; or 
               d.     Documentation-related practice mandates (entering  
                 data into the Managing and Adapting Practice [MAP]  
                 database dashboard at the end of each MAP session). 

            If counties have additional documentation requirements,  
            according to CBHDAC, it is usually based on other funding  
            requirements and/or special interests by the boards of  
            supervisors, Blue Ribbon Commissions, courts, or other state  
            departments. 

          2.DHCS billing disallowances. In a presentation document DHCS  
            shared at the California Mental Health Directors Association  
            All Directors Meeting on January 9, 2014, DHCS noted that in  
            Fiscal Years (FY) 2007-2013, disallowance rates for outpatient  
            chart reviews of a sampling of MHPs increased, with the most  
            notable increase occurring between FYs 2011-12 (26 percent)  
            and 2012-2013 (36 percent). DHCS noted that the increase may  
            have been attributed to the inclusion of children/adolescents  
            data in the sample. Prior to FY 2011-12, the triennial  
            outpatient chart samples consisted of adults only, and there  
            were separate EPSDT chart audits conducted. In addition, with  
            the inclusion of children/adolescents and the resulting Day  
            Treatment Intensive (DTI) and Day Rehabilitation (DR) paid  
            claims in the same sample, DHCS notes that the disallowance  
            rates increased. DHCS's presentation document also noted that  
            90 percent of the DTI and DR claims were disallowed in FY  
            2011-12. Primary reasons for disallowances were due to  
            provider documentation error, such as lack of required service  
            components, no documentation of attendance, absence of  
            required progress notes, medical necessity not substantiated,  
            and not meeting program Medi-Cal certification requirements.
            
          3.Concerns with existing SMH 1915(b) waiver. DHCS administers a  
            Section 1915(b) Freedom of Choice federal waiver to provide  
            SMH services using a managed care model of service delivery.  
            The SMH waiver program has been in effect since 1995, with a  
            total of eight waiver terms approved by CMS to date. The  
            eighth waiver term was approved by CMS for two years only  
            (July 1, 2013, through June 30, 2015), instead of the five  
            years initially requested by DHCS. CMS stipulated that DHCS  
            needed to continue with regular monitoring activities with  
            CMS, including monthly calls. During the monthly monitoring  








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            calls and in ongoing communications, CMS has asked questions  
            on specific areas of the SMH waiver. CMS reviews MHP triennial  
            and External Quality Review Organization reports and raised  
            concern about the findings and continued noncompliance with  
            specific waiver requirements. CMS believes that significant  
            improvement is needed in identified areas and expects the  
            state to closely monitor, ensure, and provide evidence of  
            compliance. In addition to a number of identified areas of  
            focus, CMS has expressed concern about the ongoing elevated  
            inpatient and outpatient disallowance rates resulting from  
            chart reviews (i.e., disallowed claims under the Medi-Cal  
            program). Due to past deficiencies, CMS is requiring the state  
            to provide oversight to ensure that the Medi-Cal claims  
            submitted by MHPs for SMH services meet medical necessity  
            criteria for reimbursement and that the documentation in the  
            medical records provided contains the required evidence of  
            medical necessity. CMS has requested that DHCS explore  
            establishing a process to enact fines, sanctions and  
            penalties, or corrective actions as a way to ensure  
            compliance. 
            
          4.Lack of evidence-based/best practice service provision for  
            behavioral health. The Technical Assistance  
            Collaborative/Human Services Research Institute's final report  
            in February 2012, California Mental Health and Substance Use  
            System Needs Assessment, notes that the percent of individuals  
            reported to be receiving an evidence-based practice service  
            was low: only one percent in 2010, down from two percent in  
            2009. It also notes that there is a variability among counties  
            in the use and training of staff in state-of-the-art and  
            evidence-based and recovery-oriented treatment; there is a  
            need to address better preparation of physical health  
            providers to engage and treat people with behavioral health  
            needs; and there is still disproportionate access to  
            behavioral health services on the part of certain ethnic  
            populations-compounded by the relative lack of  
            cultural/linguistic capacity among providers and practitioners  
            in the state.
          
          5.Support.  Supporters of this bill argue that paperwork  
            reduction is one great way of increasing the efficiency of the  
            health care system while helping to improve outcomes. The  
            California Chapter of the American College of Emergency  
            Physicians states that individual counties across the state  
            have their own documentation requirements, adding  








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            substantially to the amount of time Medi-Cal providers spend  
            documenting their services. The American Association for  
            Marriage and Family Therapy California Division argues that  
            paperwork overload contributes to workplace fatigue and that  
            this bill will improve the morale of mental health workers.

          6.Policy comment. 
          
               a.     This bill requires DHCS to develop a single set of  
                 documentation requirements for the  provision  of SMH  
                 services, which raises questions about a county's ability  
                 to require or collect information related to  
                 evidence-based practice implementation or other best  
                 practice assessments. The sponsor of this bill states  
                 that the intent is to limit county requirements for  
                 documentation of compliance with  billing  rules, which is  
                 not indicated in this bill. The author may wish to  
                 clarify this intent.

               b.     This bill makes findings and declarations about a  
                 national expert's review of counties' documentation  
                 requirements and determination that it takes an average  
                 of 20 minutes to prepare progress notes in California  
                 compared to an estimated five minutes in other states  
                 and, therefore, proposes to limit the amount of  
                 documentation a county can require. According to DHCS,  
                 disallowances generally occur because of a provider's  
                 inability to accurately document service provision as  
                 required, and not because of excessive paperwork  
                 requirements. According to counties, all documentation  
                 required serves a critical purpose. The author may wish  
                 to consider whether relaxing documentation requirements  
                 is the right solution at a time when CMS is closely  
                 monitoring the state because of concerns about the  
                 state's high disallowance rate, including lack of proper  
                 documentation. 
          
           SUPPORT AND OPPOSITION  :
          Support:  California Council of Community Mental Health Agencies  
          (sponsor)
                    American Association for Marriage and Family Therapy  
               California Division
                    California Chapter of the American College of  
               Emergency Physicians 
                    Mental Health America of California








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                    Steinberg Institute
          
          Oppose:   None received.


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