BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1113  
          (Beall) - As Amended August 1, 2016


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          |Policy       |Education                      |Vote:|7 - 0        |
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          |             |Health                         |     |17 - 0       |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill authorizes county and local educational agencies  
          (LEAs) to establish partnerships for the purpose of providing  
          mental health services to students. Specifically, this bill:


          1)Authorizes the county mental health plan (county MHP) or the  
            qualified provider, and an LEA, to utilize "designated  
            governmental funds" for eligible Early and Periodic Screening,  








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            Diagnosis, and Treatment (EPSDT) mental health services for  
            students enrolled in MediCal, for special education students  
            with an individualized education plan (IEP), and for  
            non-special education students served by county mental health  
            or a qualified provider. 


          2)Requires the partnership to determine the Medi-Cal mental  
            health provider that is county operated or county contracted,  
            for purposes of providing mental health services to students  
            in LEAs.  This can include the delivery of campus-based mental  
            health services to special education students and students who  
            a teacher believes may require those services, conditioned  
            upon parental consent. 


          3)Requires the partnership agreement to determine how to cover  
            the cost of mental health services if they are not covered by  
            the partnership. 


          4)Requires the partnership to participate in the existing EPSDT  
            performance outcome system to measure results of services  
            provided under the partnership agreement.


          5)Requires a partnership to be established in at least one  
            school within the LEA in the first year and to expand the  
            partnership to three additional schools within three years. 





          6)Establishes the County and Local Educational Agency  
            Partnership Fund (Partnership Fund) to provide funding for  
            partnerships through a competitive grant program. Authorizes  
            the Superintendent of Public Instruction (SPI) to allocate  
            funds from this account, contingent upon an appropriation in  








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            the annual budget act. 


          7)Requires the Department of Health Care Services (DHCS), as  
            part of the existing EPSDT performance outcome system  
            reporting requirements, to collect and utilize certain data,  
            including academic performance data, on children that receive  
            mental health services as part of an IEP or educationally  
            related mental health services from an LEA participating in  
            the LEA Medi-Cal Billing Program as part of an IEP.  The  
            California Department of Education (CDE) is required to  
            provide academic information to DHCS. 


          


          FISCAL EFFECT:


          1)Proposition 98/GF cost pressure, in the millions of dollars,  
            to implement a competitive grant program to fund county and  
            LEA partnerships. The author's office estimates approximately  
            $1.8 million would be needed per LEA.  The bill intends for at  
            least three LEAs to be funded. Actual costs could be higher or  
            lower depending upon available funding.



            This bill establishes a Partnership Fund to provide  
            competitive grants to partnerships, available upon  
            appropriation by the Legislature. The 2016-17 Budget Act does  
            not provide funding for this purpose. The bill does not  
            specify a fund source for the Partnership Fund and does not  
            expressly prohibit the use of Proposition 98/GF, thereby  
            creating cost pressure on state funds.  











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          2)Annual administrative costs to the California Department of  
            Education (CDE) of approximately $236,000 to administer the  
            competitive grant process and work with DHCS to provide data,  
            as specified. 



          COMMENTS:


          1)Purpose. Federal law establishes the Medi-Cal EPSDT program to  
            provide individuals 21 years and under, periodic screenings to  
            determine health care needs and, based upon the identified  
            health care need and diagnosis, to provide treatment services.  
            EPSDT provides a broad set of services to Medi-Cal eligible  
            children, but the mental health portion of EPSDT is a smaller  
            set of services which include group therapy, family therapy,  
            case management, crisis counseling, medication, and other  
            medically necessary services for children with serious mental  
            illness.   

            A Bureau of State Auditor report (January 2016) found that  
            LEAs and counties could improve student access to mental  
            health services by collaborating to provide services to  
            Medi-Cal eligible students.  Currently, LEAs cannot access  
            funding for EPSDT services unless they contract with their  
            respective counties. According to the author, although there  
            are current successful partnerships, only six of the 122  
            Special Education Local Planning Areas (SELPAs) have an  
            agreement with counties. One major barrier to forming  
            partnerships is disagreement over who should pay for the state  
            match as required under the EPSDT program. This bill is  
            intended to provide a financial incentive, through a  
            competitive grant process, for LEAs to enter into agreements  
            with counties.










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          2)Background on EPSDT. County MHPs are responsible for funding  
            and providing EPSDT mental health services to Medi-Cal  
            eligible children who meet clinical criteria. County MHPs  
            fulfill EPSDT obligations through direct service provision and  
            contracts.  Many county MHPs contract with LEAs or Special  
            Education Local Plan Area (SELPAs) to provide certain  
            services. County MHPs pay 100% of the costs of services and  
            submit reimbursement claims to the federal government, through  
            DHCS, to claim federal financial participation (FFP). By  
            claiming FFP, counties can be reimbursed for about 50% of  
            their costs.  Counties fund their portion of the cost of these  
            services through a combination of 2011 realignment funding,  
            1991 realignment funding, and Proposition 63 funds.  

          3)Background on mental health mandate. Prior to 1984, school  
            districts were responsible for providing all special education  
            services to children. In 1984, the Legislature enacted AB  
            3632, which transferred responsibility for providing mental  
            health services to special education pupils from school  
            districts to county mental health departments. The intent was  
            to build on counties' existing expertise, and provide  
            collaboration between schools and public mental health.  AB  
            3632 services were deemed a state-reimbursable mandate.  
            
            In 2010, during the state's fiscal crisis, state funding for  
            AB 3632 was vetoed and the mandate was suspended. AB 114  
            (Budget Committee), Chapter 43, Statutes of 2011, repealed  
            provisions of AB 3632, thereby ending the state mandate on  
            county mental health agencies to provide mental health  
            services to students with disabilities. With the passage of AB  
            114, school districts are now solely responsible for ensuring  
            that students with disabilities receive special education and  
            related services, including some services previously arranged  
            for, or provided by, county mental health agencies.

          4)Bureau of State Audit recommendations.  In January 2016, the  
            Bureau of State Audits released a report, requested by the  
            author and other members of the Legislature, on the effect of  
            AB 114 on mental health services for students.  The audit  








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            recommended that the Legislature require counties to enter  
            into agreements with SELPAs to allow SELPAs and LEAs to access  
            EPSDT funding.  The Auditor gave the example of the Desert  
            Mountain SELPA arrangement with San Bernardino County.  Desert  
            Mountain SELPA contributes to the county's required match of  
            federal funds.  This arrangement is mutually beneficial:  San  
            Bernardino County does not need to provide the full match, and  
            Desert Mountain is able to access EPSDT funding to provide  
            mental health services to Medi-Cal eligible students with and  
            without IEPs. 

          5)Comments. The 2011 realignment left counties fully responsible  
            for providing and funding specialty mental health services for  
            Medi-Cal eligible individuals. Counties receive state funding  
            to provide EPSDT services.  If the state were to provide  
            funding through competitive grants, as proposed by this bill,  
            to directly draw down federal reimbursement for EPSDT  
            services, the state could be double-paying for those services  
            if there is not a decrease in county funding for such  
            services.  
          
          6)Opposition. The Special Opportunities for Access and Reform  
            Coalition (SOAR), a coalition which includes seven SELPAs, is  
            opposed to the bill unless amended. SOAR notes there are  
            several barriers to developing partnerships between LEAs and  
            counties. They note some of the hurdles center on county  
            mental health not being willing to contract/vendorize the  
            LEA/SELPAs to provide EPSDT services, or the county mental  
            health agency charging the LEA/SELPA a high indirect cost for  
            developing this partnership.  They note that there is no state  
            policy on how an LEA can seek direct access to the Medi-Cal  
            funding for the EPSDT program through county managed care, and  
            that instead it is up to each individual LEA or SELPA to  
            negotiate directly with their county mental health program.   
            They recommend that the bill be amended to instead require  
            DHCS to develop a mediation or appeals process in state law  
            when an LEA/SELPA and county mental agency cannot agree on  
            delivery of service for an eligible recipient or when EPSDT  
            funding is not accessible for the LEA/SELPA.   








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          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081