BILL ANALYSIS �
AB 1297
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Date of Hearing: April 5, 2011
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 1297 (Chesbro) - As Introduced: February 18, 2011
SUBJECT : Medi-Cal: mental health.
SUMMARY : Expedites federal reimbursement to counties for their
Medi-Cal specialty mental health claims by conforming the
procedures and timeframes required by the Department of Mental
Health (DMH) to federal Medicaid requirements and the approved
Medicaid state plan and waivers. Specifically, this bill :
1)Clarifies that the standards and guidelines that DMH uses for
the administration of specialty mental health services
provided by county mental health plans (MHPs) must be based on
federal Medicaid requirements and the approved Medicaid state
plan and waivers.
2)Requires, for purposes of federal reimbursement, the
reimbursement amounts for specialty mental health services to
be consistent with federal Medicaid requirements and the
approved Medicaid state plan and waivers.
3)Deletes existing law requiring the reimbursement rates for
specialty mental health claims to be applied only to
reimbursement for direct client services, and, instead,
requires the rates to conform to federal Medicaid requirements
and the approved Medicaid state plan and waivers.
4)Eliminates the 15% administrative cap on the costs to MHPs for
providing specialty mental health services as specified in
existing law, and, instead, requires the administrative costs
to be claimed in a manner consistent with federal Medicaid
requirements and the approved Medicaid state plan and waivers.
5)Requires MHPs to submit specialty mental health claims within
the timeframes specified in federal Medicaid requirements and
the approved Medicaid state plan and waivers.
EXISTING LAW :
1)Establishes DMH, which directs and coordinates statewide
efforts for the treatment of mental disabilities.
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2)Establishes the Medi-Cal Program, administered by the
Department of Health Care Services (DHCS), to provide health
benefits to low-income children, their parents, or caretaker
relatives, pregnant women, elderly, blind or disabled persons,
and other individuals who meet specified eligibility criteria.
3)Requires MHPs to provide specialty mental health services to
Medi-Cal beneficiaries and seek the maximum federal
reimbursement possible for services rendered to the mentally
ill.
4)Requires the standards and guidelines for the administration
of specialty mental health services to Medi-Cal eligible
persons to be based on federal Medicaid requirements.
5)Provides that rates for reimbursing specialty mental health
and drug services under the Medi-Cal Program and rendered to
Medi-Cal beneficiaries shall be based on the amounts allowed
under federal law.
6)Requires DMH, in the 1993-94 fiscal year and fiscal years
thereafter, to establish the amount of reimbursement for
services provided by MHPs to Medi-Cal eligible individuals,
subject to the approval of the Director of DHCS.
7)Requires the reimbursement rates for specialty mental health
claims to be applied only to reimbursement for direct client
services.
8)Limits reimbursement of administrative costs to MHPs for
providing specialty mental health services to 15% of the total
cost of direct client services.
9)Requires, in state regulations, MHPs to submit specialty
mental health claims within six months. Federal regulations
require a 12-month timeframe for submission.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the sponsor, the
California Mental Health Directors Association (CMHDA), this
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bill seeks to eliminate unnecessary state-only Medi-Cal
requirements in the provision of Medi-Cal specialty mental
health services to ensure that the state accesses all
available federal resources, particularly during these
economically challenging times. CMHDA notes that California
has established a number of state-only requirements for county
MHPs to follow in their provision of these services and these
state-specific requirements needlessly limit the amount of
federal Medicaid reimbursement that is available. CMHDA adds
that these requirements contradict existing state law, which
requires counties to maximize available federal funds for
services rendered to mentally ill Medi-Cal beneficiaries.
This bill is intended to simplify the state's standards and
guidelines for these services, including federal reimbursement
amounts and claims submission timelines, to ensure that they
are consistent with federal Medicaid requirements and
California's approved Medicaid state plan and waivers. CMHDA
estimates that the changes in this bill will help counties
capture an additional $50-$100 million in federal funds.
2)BACKGROUND . Specialty mental health services are "carved out"
in the Medi-Cal Program and provided by MHPs. Specialty
mental health services are services that are provided by
mental health specialists, such as psychiatrists,
psychologists, licensed clinical social workers, licensed
marriage and family therapists, or psychiatric technicians,
rather than by a primary care physician or other physical
health care provider. Individuals are entitled to specialty
mental health services if the service is both covered under
the Medi-Cal Program and deemed medically necessary. Services
include mental health assessments, group or individual
therapy, medication support services, intensive day treatment,
crisis intervention and stabilization, and residential
treatment services.
Each county MHP is responsible for maintaining a provider
network, authorizing services, determining provider payment
rates, and paying most providers. Providers bill on a
fee-for-service basis and are paid directly by each MHP. MHPs
submit claims to DMH for processing. A MHP submits a form to
DMH certifying that it incurred the expenditures associated
with submitted claims. DMH compares the claimed amount to a
schedule called the State Maximum Allowance (SMA) that
describes the maximum amount a county may be reimbursed for
each specialty mental health service function described above
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and approves the lower of what is billed or the SMA.
DMH then submits the batch of edited claims to DHCS for
further processing. DHCS processes the claims to determine
whether the services provided meet federal and state
requirements. DHCS determines whether the claims are
approved, denied, or suspended. Once this is determined, it
electronically returns the entire batch of claims to DMH with
a determination of how much federal reimbursement is due to
the MHPs. DHCS then submits an invoice to the State
Controller for federal funds. Once federal reimbursement
funds are received by DHCS, it passes them through DMH back to
the MHPs.
3)MEDICAID 1915(b) WAIVER AND STATE PLAN . The scope and
features of the specialty mental health services provided at
the county level are determined by the state's Medicaid
1915(b) waiver, the federally-approved Medicaid state plan,
and state plan amendments (SPAs). According to a report by
the California HealthCare Foundation, entitled "Medicaid
Waivers: California's Use of a Federal Option," the state's
1915(b) mental health waiver, originally approved in 1995,
allowed the state to consolidate the financing and
organization of inpatient and outpatient mental health
services in California by developing local managed care
organizations (county MHPs) in almost every county for
Medi-Cal recipients. This waiver has been approved six times
since its inception.
In addition, California has two approved Medicaid SPAs that
modify the scope of specialty mental health benefits offered
by the MHPs. These SPAs are currently being updated by DMH
and DHCS, at the request of the federal Centers for Medicare
and Medicaid Services (CMS), to reflect current coverage and
service functions. The first SPA, approved by CMS in October
1989, added targeted case management services to the list of
services, and the second, approved by CMS in July 1993, added
rehabilitative mental health services, thereby broadening the
range of personnel and locations available to provide these
services to eligible beneficiaries.
4)SMAs . SMAs are published annually by DMH to provide the
maximum amount a county may be reimbursed for each specialty
mental health service function. Counties are alerted to the
SMAs through information notices sent by DMH. For example,
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DMH's most recent information notice reflects that counties'
current federal reimbursement for 24-hour hospital inpatient
services is set at a maximum of $1,172.71 per day. According
to CMHDA, this amount may not reflect the actual costs to
counties to provide this service, and it does not take into
consideration that CMS does not set a maximum dollar amount
for this service or any other type of Medi-Cal service mode.
CMHDA notes that the SMAs for all services (except inpatient,
psychiatric health facility, and adult crisis residential)
have been frozen since fiscal year 2006-07 in order to limit
State General Fund payments for the Early and Periodic
Screening, Diagnosis, and Treatment Program, which provides
physical and mental health services to Medi-Cal beneficiaries
under the age of 21. This bill seeks to eliminate the use of
SMAs in determining the federal reimbursement due to counties
by only requiring the use of federal allowable amounts for the
purposes of federal reimbursement.
With respect to administrative costs, this bill deletes the
provision of current law that limits reimbursement for
counties' administrative activities for providing these
services to 15% and, instead, requires their administrative
costs to be claimed in a manner consistent with federal
Medicaid requirements and the state's Medicaid plan and
waivers.
5)CLAIMS SUBMISSION TIMELINES . DMH regulations specify that
counties must submit claims for specialty mental health
services within six months. However, federal regulations
require Medi-Cal claims to be submitted no later than 12
months from the date of service. This bill eliminates DMH's
use of an administratively-established submission deadline of
six months for these claims and, instead, requires counties to
submit claims within the timeframes specified in federal
Medicaid requirements and California's approved Medicaid state
plan and waivers, i.e. 12 months.
6)SUPPORT . Supporters, led by the California State Association
of Counties (CSAC), state that this bill will ensure timely
federal reimbursement to counties for their provision of
specialty mental health services by aligning state
requirements with existing federal requirements to help
maximize federal funds for these services, all without
impacting the state's General Fund. CSAC adds that expanding
the timeframe for counties to submit specialty mental health
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claims from the state's six month limit to the federal
standard of 12 months will give counties the flexibility in
submitting claims that complex health care scenarios demand.
REGISTERED SUPPORT / OPPOSITION :
Support
California Mental Health Directors Association (sponsor)
Amador County Health Services
California State Association of Counties
Contra Costa County Mental Health Administration
Humboldt County Department of Health and Human Services
Regional Council of Rural Counties
Sacramento County Board of Supervisors
San Mateo County Board of Supervisors
Stanislaus County Behavioral Health and Recovery Services
Tri-City Mental Health Center
Tuolumne County Behavioral Health Department
Opposition
None on file.
Analysis Prepared by : Cassie Royce / HEALTH / (916) 319-2097