BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1297 (Chesbro)
Hearing Date: 8/25/2011 Amended: 7/11/2011
Consultant: Katie Johnson Policy Vote: Health 9-0
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BILL SUMMARY: AB 1297 would require provider reimbursement for
specialty mental health services to be consistent with federal
Medicaid requirements for calculating federal upper payment
limits (UPL), remove statewide maximum allowances, extend the
period for claims submission, and require the reimbursement
methodology to be based on certified public expenditures and to
conform to federal Medicaid requirements.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Removal of SMA limits potentially
significant Federal*
Start-up administrative $75 $150 $100
General/**
expenditures Federal
*Increased federal financial participation
**50 percent General Fund, 50 percent federal funds
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
This bill would require provider reimbursement for specialty
mental health services to be consistent with federal Medicaid
requirements for calculating federal upper payment limits (UPL).
This bill would also require claims for reimbursement to be
submitted within the longer timeframe permitted by federal law
rather than the shorter timeframes set forth in state
regulation. This bill would require the reimbursement
methodology to be based on certified public expenditures (CPEs)
and to conform to federal Medicaid requirements. This bill would
require standards and guidelines for the administration of
mental health services to Medi-Cal eligible individuals to be
AB 1297 (Chesbro)
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consistent with federal Medicaid requirements, as specified in
the approved Medicaid state plan and waivers to ensure full and
timely federal reimbursement to counties.
This bill would require the Department of Mental Health (DMH)
and the Department of Health Care Services (DHCS) to consult
with the California Mental Health Directors Association when
developing a reimbursement methodology and that reimbursement
amounts and administrative costs be claimed in a manner
consistent with federal Medicaid requirements and the approved
Medicaid state plan and waivers. DHCS would need increased
resources to claim additional FFP of approximately $100,000
annually, as well as one-time costs of $25,000 in FY 2011-2012
and $50,000 in FY 2012-2013 in order to update related
regulations. Costs would be shared 50 percent General Fund and
50 percent federal funds.
Increasing reimbursement up to the federal UPLs would increase
all components of payment proportionally to counties for
Medi-Cal mental health services and would effectively eliminate
the statewide maximum allowances (SMAs) imposed by DMH that were
put in place in order to limit the state's General Fund
contribution to Medi-Cal mental health services. This means that
there would be increased federal financial participation, but
that state and counties would need to pay more in order to fully
match those federal funds. These services are currently paid for
as follows: for EPSDT, 10 percent county funds, 40 percent
General Fund, and 50 percent federal funds; for adult specialty
mental health care, 50 percent county funds and 50 percent
federal funds.
There would be increased cost pressure on the General Fund to
contribute to its share of the payment up to the higher UPL
levels, likely between $50 million to $100 million. In some
instances, the SMA is equal to the federal UPLs. Costs would
stay the same for those services.
DHCS is currently negotiating a state plan amendment (SPA) with
the federal government to establish a supplemental payment
program for mental health services in order to allow counties to
draw down additional federal matching funds based on available
CPEs. The non-federal share would be paid 100 percent by county
funds with no General Fund component. The SPA would be
retroactive to January 1, 2009, but it is unclear when federal
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approval would be granted.
AB 100 (Committee on Budget), Chapter 5, Statutes of 2011,
allocates up to $862 million from the Mental Health Services
Fund in FY 2011-2012 in order to fully fund existing mental
health programs, including Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT), Medi-Cal Specialty Mental
Health Managed Care, and mental health services provided for
special education pupils. Ongoing funding has yet to be
identified.
AB 102 (Committee on Budget), Chapter 29, Statutes of 2011,
shifts the administrative duties of Medi-Cal specialty mental
health managed care, the Early Periodic Screening Diagnosis and
Treatment Program (EPSDT), and other functions related to
federal Medicaid requirements from DMH to DHCS, effective July
1, 2012.
AS PROPOSED TO BE AMENDED. The author's proposed amendments
would delay implementation until July 1, 2012, and would clarify
that any county claiming reimbursement up to the federal UPL
could not use state funds to pay the non-federal share of the
CPE. These two amendments would remove General Fund cost
pressures associated with accessing additional federal funding.
DHCS administrative costs would remain.