BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
754 (Chesbro)
Hearing Date: 08/17/2009 Amended: 06/02/2009
Consultant: Dan Troy Policy Vote: Health 10-0
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BILL SUMMARY: AB 754 would revise the obligations and
timeframes for the Department of Mental Health and the
Department of Health Care Services to reimburse county mental
health plans for Medi-Cal specialty mental health claims.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DHCS staffing $116 $232 $232
General/
Federal
DMH staffing Unknown, but likely several
General
Hundred thousand
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Under current law, the Department of Health Care Services (DHCS)
administers the Medi-Cal program to provide health benefits to
low-income children; their parents or caretaker relatives;
pregnant women; elderly, blind, or disabled persons; nursing
home residents; and refugees who meet specified eligibility
criteria. Current law also establishes the Department of Mental
Health (DMH) to direct and coordinate mental health services in
the state primarily through contracts with county mental health
agencies. Current law also requires the state to pay properly
submitted invoices within 45 days, assuming certain conditions
are met. This time frame does not apply to Medi-Cal
reimbursements, except in certain circumstances.
This bill would do the following:
Require amendments to contracts between DMH and county
mental health plans (MHPs) to be agreed to by both parties;
Permit mental health plans to reopen contracts with DMH
if changes to state or federal laws impact MHP costs;
Require both DMH and DHCS to submit claims for federal
reimbursements (Federal Financial Participation) as the
claims are received and to make payments to the MHPs after
the federal payments are received by the state;
Require DMH to allocate and distribute the full
contracted amount of General Fund to the MHPs at the
beginning of the contract period.
Establish June 1 of the prior fiscal year as the date by
which DMH must consult with representatives of the counties
relating to the methodology for allocating General Fund for
specialty mental health care to Medi-Cal beneficiaries.
Page 2
AB 754 (Chesbro)
This bill is sponsored by the County Mental Health Directors
Association (CMHDA). CMHDA contends that there have been
significant disruptions in service reimbursement claims on the
part of both DMH and DHCS in recent years and that this bill
will help increase the efficiency of mental health services by
enabling funds to flow to counties in a more timely manner.
In 2007, the Department of Finance's Office of State Audits and
Evaluations (OSAE) released a report on the fiscal processes DMH
uses in the payment of local assistance claims. The report
confirmed that payments were not being made in a timely manner.
Problems identified in the report included ineffective and
decentralized program governance between DMH and the Department
of Health Care Services and information systems that are
defective and outdated.
This bill would increase state costs by requiring new activities
for DHCS and DMH. DHSC reports the need for three positions and
$232,000 ($116,000 in General Fund) to directly pay and account
for Federal Financial Participation and for workload related the
reopening of MHP contracts. DMH reports indeterminable but
likely significant costs, as well, due to workload related to
contract reopening and other required activities.
Also, by requiring DMH to allocate the full amount of contracted
state General Fund to MHPs at the beginning of the contract
period, this bill has the potential to exacerbate the state's
cash management problems. Currently, DMH has authority to
advance up to 95 percent of the Mental Health Managed Care
General Fund budget to MHPs (total budget of $113.3 million), so
the impact on the cash situation would be small. However, the
language in the bill may also capture the Early and Periodic
Screening, Diagnosis and Treatment (EPSDT). The Department of
Finance has estimated this impact to be approximately $365
million. This may present a challenge to the state's cash
management efforts.
SB 152 (Cox) would, commencing March 1, 2010, require the
Department of Mental Health to send a reimbursement claim to the
State Controller within 90 days after the receipt of a mental
health service claim from county contractors, with specified
exceptions. SB 152 is currently in possession of the Assembly
Health Committee.