BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 296| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: SB 296 Page 2 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time and paperwork required of counties and providers consistent with federal standards and b) eliminate duplicative or outdated requirements. 3)Requires DHCS to complete the billing documentation requirements by January 1, 2017, for use commencing July 1, 2017, and to update the billing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. SB 296 Page 3 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 SB 296 Page 4 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 SB 296 Page 5 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. SB 296 Page 6 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 SB 296 Page 7 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 **** END ****