BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   THIRD READING 


          Bill No:  SB 296
          Author:   Cannella (R)
          Amended:  4/20/15  
          Vote:     21  

           SENATE HEALTH COMMITTEE:  9-0, 4/15/15
           AYES:  Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,  
            Pan, Roth, Wolk

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/28/15
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SUBJECT:   Medi-Cal:  specialty mental health services:   
                     documentation requirements


          SOURCE:    California Council of Community Mental Health  
          Agencies


          DIGEST:  This bill requires the Department of Health Care  
          Services (DHCS) to develop a single set of billing 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 billing documentation requirements  
          no less than every two years, unless more frequent updating is  
          required, as specified. Prohibits counties from requiring  
          additional billing documentation for SMH services, unless  
          required by funding sources. 


          ANALYSIS:   








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          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, and other  
            stakeholders to develop a single set of service billing  
            documentation requirements for the provision of SMH services.

          2)Requires the billing documentation requirements to: a)  
            minimize time and paperwork required of counties and providers  
            consistent with federal standards and b) eliminate duplicative  
            or outdated requirements.

          3)Requires DHCS to complete the billing documentation  
            requirements by January 1, 2017, for use commencing July 1,  
            2017, and to update the billing 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 billing  
            documentation, after DHCS adopts the standard billing  
            requirements, for SMH services that go beyond DHCS's billing  
            requirements unless necessary for funding from other funding  
            sources that are also used to pay for the services, or for  
            purposes other than documentation for billing.

          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.







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          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  
            applicable state laws. 

          2)The Centers for Medicare and Medicaid Services (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. 

            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  







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            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  
               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  







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            were separate Early and Periodic Screening, Diagnostic, and  
            Treatment 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  
            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. 
            







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          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.
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Senate Appropriations Committee:

           Likely one-time costs up to $150,000 to consult with  
            stakeholders, develop the documentation guidelines, and adopt  
            regulations (General Fund and federal funds).

           No significant impact on local mental health plans is expected  
            (local funds). Under current law, Medi-Cal specialty mental  
            health services are provided through county mental health  
            plans. Under this bill, those mental health plans would be  
            required to use the documentation requirements developed under  
            the bill. It is not likely that creating uniform documentation  
            requirements will significantly increase local administrative  
            costs or significantly change the utilization of services.


          SUPPORT:   (Verified5/28/15)


          California Council of Community Mental Health Agencies (source)
          American Association for Marriage and Family Therapy California  
          Division
          California Chapter of the American College of Emergency  







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          Physicians 
          California Coalition for Mental Health
          Mental Health America of California
          Pacific Clinics
          Steinberg Institute


          OPPOSITION:   (Verified5/28/15)


          None received


          ARGUMENTS IN 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  
          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.





           
          Prepared by:Reyes Diaz / HEALTH / 
          5/30/15 15:04:09


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