BILL NUMBER: SB 745 CHAPTERED 09/28/00 CHAPTER 811 FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2000 APPROVED BY GOVERNOR SEPTEMBER 28, 2000 PASSED THE SENATE AUGUST 31, 2000 PASSED THE ASSEMBLY AUGUST 30, 2000 AMENDED IN ASSEMBLY AUGUST 29, 2000 AMENDED IN ASSEMBLY AUGUST 7, 2000 AMENDED IN ASSEMBLY JUNE 22, 2000 AMENDED IN ASSEMBLY MARCH 15, 2000 AMENDED IN SENATE MAY 28, 1999 AMENDED IN SENATE MAY 18, 1999 AMENDED IN SENATE MAY 10, 1999 INTRODUCED BY Senator Escutia FEBRUARY 24, 1999 An act to add Sections 5777.5, 5777.6, and 14456.5 to the Welfare and Institutions Code, relating to mental health. LEGISLATIVE COUNSEL'S DIGEST SB 745, Escutia. Mental health: contracts: disputes. Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Services, pursuant to which medical benefits are provided to public assistance recipients and certain other low-income persons. Existing law further provides that the State Department of Mental Health shall implement managed mental health care for Medi-Cal beneficiaries through fee-for-service or capitated rate contracts with mental health plans. This bill would require the State Department of Mental Health to require any mental health plan that provides Medi-Cal services to enter into a memorandum of understanding containing specified requirements with any Medi-Cal managed care plan that provides Medi-Cal health services to some of the same Medi-Cal recipients served by the mental health plan. The bill would require the establishment of a procedure to ensure access to outpatient mental health services, as required by the Early Periodic Screening and Diagnostic Treatment program standards, for any child in foster care who has been placed outside his or her county of adjudication. The imposition of these requirements on counties of adjudication would create a state-mandated local program. This bill would further require the State Department of Health Services to ensure that coverage is provided for necessary prescription medications and related medically necessary medical services that are prescribed by a local mental health plan provider, and that are within the Medi-Cal scope of benefits, but are excluded from coverage under the above-described requirements applicable to the State Department of Mental Health. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) Persons who receive Medi-Cal mental health services through mental health plans pursuant to Part 2.5 (commencing with Section 5775) of Division 5 and Article 5 (commencing with Section 14680) of Chapter 8.8 of Part 3 of Division 9 of the Welfare and Institutions Code, require timely access to prescription drugs prescribed by the Medi-Cal mental health plan providers because these prescription drugs may be crucial to maintaining stability and furthering treatment goals. (b) Disputes about responsibility for authorizing or providing specific prescription drugs prescribed by Medi-Cal mental health plan providers have the effect of disrupting the timely access to prescription drugs needed by persons receiving services through Medi-Cal mental health plans. (c) Medi-Cal recipients have the right to timely access to prescription drugs regardless of the entity responsible to provide or authorize coverage. (d) Foster children who are placed outside their county of residence and who need specialty mental health services provided by county mental health plans encounter delays and difficulties in accessing these specialty mental health services. (e) Under the federal Medicaid Act, including the Balanced Budget Act of 1997, the state has special responsibilities to children in foster care including those who are placed outside their county of residence. The state must ensure that foster children placed outside their county of residence receive timely and appropriate access to necessary mental health services, including mental health services pursuant to the federal Early and Periodic Screening, Diagnosis and Treatment Program (42 U.S.C. Sec. 1396d(a)(4)(B). SEC. 2. It is the intent of the Legislature that access to prescription medications and other services for Medi-Cal recipients who receive mental health services through county mental health plans and who are also members of Medi-Cal managed care plans or other health care plans shall be no less than the timely access enjoyed by Medi-Cal recipients who are not members of Medi-Cal managed care plans or who do not have other health care coverage. SEC. 3. Section 5777.5 is added to the Welfare and Institutions Code, to read: 5777.5. (a) (1) The department shall require any mental health plan that provides Medi-Cal services to enter into a memorandum of understanding with any Medi-Cal managed care plan that provides Medi-Cal health services to some of the same Medi-Cal recipients served by the mental health plan. The memorandum of understanding shall comply with applicable regulations. (2) For purposes of this section, a "Medi-Cal managed care plan" means any prepaid health plan or Medi-Cal managed care plan contracting with the State Department of Health Services to provide services to enrolled Medi-Cal beneficiaries under Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9, or Part 4 (commencing with Section 101525) of Division 101 of the Health and Safety Code. (b) The department shall require the memorandum of understanding to include all of the following: (1) A process or entity to be designated by the local mental health plan to receive notice of actions, denials, or deferrals from the Medi-Cal managed care plan, and to provide any additional information requested in the deferral notice as necessary for a medical necessity determination. (2) A requirement that the local mental health plan respond by the close of the business day following the day the deferral notice is received. (c) The department may sanction a mental health plan pursuant to paragraph (1) of subdivision (e) of Section 5775 for failure to comply with this section. (d) This section shall apply to any contracts entered into, amended, modified, extended, or renewed on or after January 1, 2001. SEC. 4. Section 5777.6 is added to the Welfare and Institutions Code, to read: 5777.6. (a) Each local mental health plan shall establish a procedure to ensure access to outpatient mental health services, as required by the Early Periodic Screening and Diagnostic Treatment program standards, for any child in foster care who has been placed outside his or her county of adjudication. (b) The procedure required by subdivision (a) may be established through one or more of the following: (1) The establishment of, and federal approval, if required, of, a statewide system or procedure. (2) An arrangement between local mental health plans for reimbursement for services provided by a mental health plan other than the mental health plan in the county of adjudication and designation of an entity to provide additional information needed for approval or reimbursement. This arrangement shall not require providers who are already credentialed or certified by the mental health plan in the beneficiary's county of residence to be credentialed or certified by, or to contract with, the mental health plan in the county of adjudication. (3) Arrangements between the mental health plan in the county of adjudication and mental health providers in the beneficiary's county of residence for authorization of, and reimbursement for, services. This arrangement shall not require providers credentialed or certified by, and in good standing with, the mental health plan in the beneficiary's county of residence to be credentialed or certified by the mental health plan in the county of adjudication. (c) The department shall collect and keep statistics that will enable the department to compare access to outpatient specialty mental health services by foster children placed in their county of adjudication with access to outpatient specialty mental health services by foster children placed outside of their county of adjudication. SEC. 5. Section 14456.5 is added to the Welfare and Institutions Code, to read: 14456.5. (a) For purposes of this section, Medi-Cal managed care plan means any prepaid health plan or Medi-Cal managed care plan contracting with the department to provide services to enrolled Medi-Cal beneficiaries under Chapter 7 (commencing with Section 14000) or this chapter, or Part 4 (commencing with Section 101525) of Division 101 of the Health and Safety Code. (b) The department shall ensure that coverage is provided for medically necessary prescription medications and related medically necessary medical services that are prescribed by a local mental health plan provider, and are within the Medi-Cal scope of benefits, but are excluded from coverage under Part 2.5 (commencing with Section 5775) of Division 5, by doing, at least, all of the following: (1) Requiring Medi-Cal managed care plans to comply with the following standards: (A) The decision regarding responsibility and coverage for a prescription drug shall be made by the Medi-Cal managed care plan within 24 hours, or one business day, from the date the request for a decision is received by telephone or other telecommunication device. (B) The decision regarding responsibility and coverage for services, such as laboratory tests, that are medically necessary because of medications prescribed by a mental health provider, shall be made by the Medi-Cal managed care plan within seven days following the date the request for a decision is received by telephone or other telecommunication device. (C) If the decision of the Medi-Cal managed care plan on the request is a deferral because of a determination that the Medi-Cal managed care plan needs more information, the Medi-Cal managed care plan shall transmit notice of the deferral, by facsimile or by other telecommunication system, to the pharmacist or other service provider, to the prescribing mental health provider, and to a designated mental health plan representative. The notice shall set out with specificity what additional information is needed to make a medical necessity determination. (D) Any denial of authorization or payment for a prescription medication or for any services such as laboratory tests that may be medically necessary because of medications ordered by a mental health plan provider shall set forth the reasons for the denial with specificity. The denial notice shall be transmitted by facsimile or other telecommunication system to the pharmacist or other service provider, to the prescribing mental health provider, to a designated mental health plan representative, and by mail to the Medi-Cal beneficiary. (E) For purposes of subsequent requests for a medication, the local mental health plan provider prescribing the prescription medication shall be treated as a plan provider under subdivision (a) of Section 1367.22 of the Health and Safety Code. (F) If the decision cannot be made within five working days because of a request for additional information, any Medi-Cal managed care plan licensed pursuant to Division 2 (commencing with Section 1340) of the Health and Safety Code shall inform the enrollee as required by paragraph (5) of subdivision (h) of Section 1367.01 of the Health and Safety Code. In regard to any Medi-Cal managed care plan contract as described pursuant to subdivision (a) that is issued, amended, or renewed on or after January 1, 2001, with a plan not licensed pursuant to Division 2 (commencing with Section 1340) of the Health and Safety Code, if the decision cannot be made within five working days because of a request for additional information as specified in subparagraph (C), the plan shall notify the enrollee, in writing, that the plan cannot make a decision to approve, modify, or deny the request for authorization. All managed care plans shall, upon receipt of all information reasonably necessary for making the decision and that was requested by the plan, approve, modify, or deny the request for authorization within the timeframes specified in subparagraph (A) or (B), whichever applies. (2) In consultation with the Medi-Cal managed care plans, the State Department of Mental Health, and local mental health plans establishing a process to recognize credentialing of local mental health plan providers, for the purpose of expediting approval of medications prescribed by a local mental health plan provider who is not contracting with the Medi-Cal managed care plan. In implementing this requirement, the Medi-Cal managed care plan shall not be required to violate licensure, accreditation, or certification requirements of other entities. (3) Requiring any Medi-Cal managed care plan to enter into a memorandum of understanding with the local mental health plan. The memorandum of understanding shall comply with applicable regulations. (c) The department may sanction a Medi-Cal managed care plan for violations of this section pursuant to Section 14088.23 or 14304. (d) Every Medi-Cal managed care plan that provides prescription drug benefits and that maintains one or more drug formularies shall provide to members of the public, upon request, a copy of the most current list of prescription drugs on the formulary of the Medi-Cal managed care plan, by therapeutic category, with an indication of whether any drugs on the list are preferred over other listed drugs. If the Medi-Cal managed care plan maintains more than one formulary, the plan shall notify the requester that a choice of formulary lists is available. (e) This section shall apply to any contracts entered into, amended, modified, or extended on or after January 1, 2001. SEC. 6. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.