BILL ANALYSIS                                                                                                                                                                                                    Ó




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                                UNFINISHED BUSINESS 


          Bill No:  SB 296
          Author:   Cannella (R)
          Amended:  8/28/15  
          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

           SENATE FLOOR:  40-0, 6/1/15
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,  
            Stone, Vidak, Wieckowski, Wolk

           ASSEMBLY FLOOR:  79-0, 9/2/15 - See last page for vote

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


          SOURCE:    California Council of Community Mental Health  
          Agencies

          DIGEST:   This bill limits the scope of the service billing  
          documentation requirements that the Department of Health Care  
          Services (DHCS) may apply when conducting an audit of Medi-Cal  
          specialty mental health (SMH) services, as specified. This bill  
          also requires DHCS to consider further revisions to its service  
          billing documentation requirements and to prepare, in  








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          consultation with counties, providers, and other stakeholders,  
          and to submit to the Legislature a proposal to accomplish  
          specified objectives.

          Assembly Amendments delete the requirement for DHCS to develop a  
          single set of service billing documentation requirements, after  
          consulting counties, providers, and other stakeholders, and  
          instead require DHCS to limit the scope of service billing  
          documentation requirements, when auditing Medi-Cal SMH services,  
          to criteria specified in state regulations, letters, and  
          directives; federal Medicaid terms and conditions; and in the  
          state's Medicaid State Plan.

          ANALYSIS: 
          
          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 limit the scope of any service billing  
            documentation requirements to criteria clearly and explicitly  
            set forth in any of the following: a) regulations,  
            interpretive letters, and compliance directives sent by DHCS  
            to counties in a previous fiscal year; b) federal terms and  
            conditions of the Medicaid Program; and c) the Medicaid State  
            Plan.

          2)Requires an audit requirement that does not meet the criteria  
            in 1) above to be considered an advisory finding only for  
            which no disallowance can be made, unless DHCS modifies its  
            regulations to make the audit requirement explicit, or  
            provides an interpretive letter or other written clarification  
            to counties that clearly prescribes the requirement.








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          3)Prohibits DHCS from requiring a county or county contract  
            provider to copy or reenter any unchanged information from a  
            patient's existing care record into any subsequent progress  
            note, assessment, or treatment plan for that patient, unless  
            explicitly required by a federal directive. 

          4)Requires a DHCS regulation, interpretive letter, compliance  
            directive, or audit requirement relating to service billing  
            documentation to allow counties and county contract providers,  
            when documenting a patient's treatment, to incorporate by  
            reference any information from the patient's entire case  
            record, including, but not limited to, assessments, treatment  
            plans, evaluations, and progress notes. 

          5)Requires DHCS to consider further revisions to its service  
            billing documentation requirements to minimize the time and  
            paperwork required of counties and providers, consistent with  
            federal standards, and to eliminate duplicative or obsolete  
            requirements.

          6)Requires DHCS to submit a proposal to the Legislature, to  
            accomplish the requirements in 5) above, in the same fiscal  
            year that DHCS submits to the federal Centers for Medicare and  
            Medicaid Services (CMS) its proposal to revise the billing  
            method for mental health services from the current practice of  
            billing by the minute to a system that provides for greater  
            documentation streamlining, including, but not limited to, a  
            capitated system. Requires DHCS, in preparing the proposal, to  
            consult with counties, providers, and other stakeholders.

          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  








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            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)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  
            documentation done well can help protect a behavioral health  
            practitioner from billing disallowances. 

          3)State SMH service reimbursement. In order to receive  
            reimbursement for SMH services, the current contracts that  








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            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. 

          4)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%) and  
            2012-2013 (36%). 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 Early and Periodic Screening, Diagnostic, and  








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            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% 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.

          5)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.

          6)Opposition. The opposition listed below is based upon the  
            previous version. 

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

          According to the Assembly Appropriations Committee, potential  
          administrative staff costs to DHCS in the range of several  
          hundred thousand dollars in staff costs for at least one to two  
          years.

          SUPPORT:   (Verified9/2/15)








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


          OPPOSITION:   (Verified9/2/15)


          Department of Finance


          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.
           

           ASSEMBLY FLOOR:  79-0, 9/2/15
           AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  








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            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
           NO VOTE RECORDED: Jones-Sawyer


          Prepared by:Reyes Diaz / HEALTH / 
          9/2/15 18:56:24


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