BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 152|
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THIRD READING
Bill No: SB 152
Author: Cox (R), et al
Amended: 4/14/09
Vote: 21
SENATE HEALTH COMMITTEE : 11-0, 04/01/09
AYES: Alquist, Strickland, Aanestad, Cedillo, Cox,
DeSaulnier, Leno, Maldonado, Negrete McLeod, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : 12-0, 4/27/09
AYES: Kehoe, Cox, Corbett, Denham, DeSaulnier, Hancock,
Leno, Oropeza, Runner, Walters, Wolk, Yee
NO VOTE RECORDED: Wyland
SUBJECT : Medi-Cal funding: mental health services
SOURCE : Regional Council of Rural Counties
DIGEST : This bill, commencing March 1, 2010, requires
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. The bill provides
that interest will accrue on the claim beginning on the
91st day after submission, to be paid in equal parts from
the budgets of the Department of Mental Health, the
Department of Health Care Services, and the California
Health and Human Services.
ANALYSIS :
CONTINUED
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Existing federal law establishes the Medicaid program to
provide comprehensive health benefits to low-income
persons.
Existing state law:
1. Establishes the Department of Mental Health (DMH), which
directs and coordinates statewide efforts for the
treatment of mental illness.
2. Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), which
provides comprehensive 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.
3. Provides for DMH to implement managed mental health care
for Medi-Cal beneficiaries through fee-for-service or
capitated rate contracts with county mental health
plans, as well as other entities.
4. Provides counties the right of first refusal for these
contracts.
5. Generally requires state agencies to pay properly
submitted, undisputed invoices within 45 days of
receipt, or automatically calculate and pay appropriate
late payment penalties, as specified. This does not
apply to claims for reimbursement for health care
services provided under the Medi-Cal program, unless the
Medi-Cal health care services provider is a small
business or nonprofit organization.
This bill:
1. Requires the Controller to reimburse any city, county,
or city and county within 90 days after the receipt of a
reimbursement claim by DMH for mental health care
services provided by the city, county, or city and
county to Medi-Cal beneficiaries.
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2. Requires that, beginning on the 91st day, interest will
accrue at the Pooled Money Investment Account rate, to
be paid from the DMH budget.
3. Requires that interest charges will not accrue against
the department's budget for periods when the funding to
the department is insufficient to pay the claim. If
sufficient funds are unavailable, this bill also
requires the Controller to request the Director of
Finance to include any amounts necessary to satisfy the
claims in a request for a deficiency appropriation.
Background
Generally, Medi-Cal is responsible for providing both
physical and mental health care services to beneficiaries.
Medi-Cal services are provided by a combination of
fee-for-service providers and Medi-Cal managed care plans.
Specialty mental health services, defined in regulation,
include medically necessary inpatient and outpatient
services delivered by a mental health professional to
patients who meet certain diagnostic and impairment
criteria. These services have been "carved out" of the
Medi-Cal program, meaning they are not administered by
DHCS, but are the responsibility of DMH and county mental
health programs. These services are provided by counties
through contracts with DMH, using a managed care model of
service delivery. Each county mental health department is
responsible for providing specialty mental health services
to Medi-Cal recipients in its county, and may provide those
services itself, or through contracted providers.
Since this carve-out was implemented, the services provided
by the county plans have been further expanded to include
services provided under the Medicaid Early and Periodic
Screening, Diagnosis, and Treatment (EPSDT) program. EPSDT
is a federal Medicaid entitlement program which states must
administer as a condition of receiving federal Medicaid
funds. The program covers screening, diagnosis, and
treatment services, and any service that falls under the
federal definition of "medical necessity," including mental
health services, even if the service is not covered by a
state's Medicaid program, for Medicaid recipients up to the
age of 21.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Interest Payments Unknown,
depending on number General
and extent of future late
reimbursements,
if any.
SUPPORT : (Verified 4/28/09)
Regional Council of Rural Counties (source)
Board of Supervisors County of Santa Clara
California Communities United Institute
California Mental Health Directors Association
California State Association of Counties
County of Sacramento
County of San Bernardino
Urban Counties Caucus
OPPOSITION : (Verified 4/28/09)
California Department of Health Care Services
ARGUMENTS IN SUPPORT : The Regional Council of Rural
Counties (RCRC) states that it has become commonplace for
county Medi-Cal mental health claims to be held at DMH for
90 days or longer and a large number of claims have been
held for more than a year. RCRC further states that, while
DMH has begun to revamp their current financial management
practices and systems to address these delays, layers of
problems with staffing, processes, and computer reliability
continue. RCRC contends that California's rural counties
do not have the fiscal capacity to sustain millions of
dollars in overdue claims for the state's Medi-Cal program
and argues that prompt reimbursement is in the best
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interest of the state, counties, and local providers.
The California State Association of Counties writes that
the DMH's inability to process reimbursement claims from
counties in a timely manner has created a cash flow crisis
in several small counties, limiting their ability to match
state and federal dollars, borrow money, and provide
mandated contractual services. In some cases, the claims
date back to 2004.
The County of San Bernardino states that if counties are
forced to cut or stifle mental health services because of
slow and/or delinquent reimbursement by DMH, counties will
be faced with increased emergency visits, homelessness and
incarcerations caused by untreated mental illness.
ARGUMENTS IN OPPOSITION : DHCS states that this bill is
unnecessary because, along with DMH and the Office of State
Audits and Evaluations, they are currently taking direct
actions to address late payment issues by implementing a
corrective plan. DHCS reports that this plan includes the
establishment of a Medi-Cal Claims Customer Service Unit
within DMH and the development of a new electronic claims
processing system, which will streamline claims processing
and increase accuracy and timeliness. DHCS further states
that the plan also includes the revision of an automated
accounting system which will replace the current manual
process for federal financial participation invoices. DHCS
contends that this bill does nothing to address the factors
that contribute to delayed reimbursement and instead may
require the state to redirect general fund money from other
valuable state programs in order to pay interest on claims
after the 91st day.
CTW:do 4/30/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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