BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1297|
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THIRD READING
Bill No: AB 1297
Author: Chesbro (D)
Amended: 8/31/11 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 7/6/11
AYES: Hernandez, Strickland, Alquist, Anderson, Blakeslee,
De Le�n, DeSaulnier, Rubio, Wolk
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 70-0, 5/12/11 - See last page for vote
SUBJECT : Medi-Cal: mental health
SOURCE : County Mental Health Directors Association
DIGEST : This bill requires provider reimbursement for
specialty mental health services to be consistent with
federal Medicaid requirements for calculating federal upper
payment limits, removes statewide maximum allowances,
extend the period for claims submission, and requires the
reimbursement methodology to be based on certified public
expenditures and to conform to federal Medicaid
requirements.
ANALYSIS : Existing law:
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1. Provides for the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which
qualified low-income persons are provided with health
care services, including mental health services. The
Medi-Cal program is partially governed and funded under
federal Medicaid provisions. Under existing law, the
Department of Mental Health (DMH) is required to provide
specialty mental health services for Medi-Cal recipients
through fee-for-service or capitated contracts with
mental health plans (MHPs). The DMH establishes
standards, guidelines, and reimbursement amounts for
specialty mental health services based on the federal
Medicaid requirements.
2. Requires counties to certify that required matching
funds are available prior to the reimbursement of
federal funds.
3. Establishes procedures, including reimbursement and
claiming procedures, reviews and oversight, and appeal
processes for MHPs and MHP subcontractors.
4. Requires the DHCS and the DMH to jointly develop a new
rate setting methodology for reimbursements for direct
client services that meets specified requirements,
including that administrative costs be claimed
separately and limited to 15 percent of the total cost
of direct client services.
This bill:
1. Requires provider reimbursement for specialty mental
health services to be consistent with federal Medicaid
requirements for calculating federal upper payment
limits (UPL).
2. Requires claims for reimbursement to be submitted within
the longer timeframe permitted by federal law rather
than the shorter timeframes set forth in state
regulation.
3. Requires the reimbursement methodology to be based on
certified public expenditures (CPEs) and to conform to
federal Medicaid requirements.
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4. Requires standards and guidelines for the administration
of mental health services to Medi-Cal eligible
individuals to be consistent with federal Medicaid
requirements, as specified in the approved Medicaid
state plan and waivers to ensure full and timely federal
reimbursement to counties.
5. Requires DMH and DHCS to consult with the California
Mental Health Directors Association (CMHDA) 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.
6. Clarifies that any county claiming reimbursement up to
the federal UPL could not use state funds to pay the
non-federal share of the CPE, and delays implementation
until July 1, 2012.
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
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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, 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 determination is made,
DHCS 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.
Statewide Maximum Allowance (SMA) . 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, 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 Centers for Medicare and
Medicaid Services (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 (GF) 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. Instead, this
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bill requires reimbursement amounts to be consistent with
federal Medicaid requirements for calculating federal UPLs.
Federal UPLs are the maximum amount a provider can be paid
under Medicare payment principles. In addition, this bill
requires the reimbursement methodology for MHPs to be based
on CPEs and to conform to Medicaid requirements. CPEs
enable government providers to certify and receive federal
reimbursement for costs that they incur that above the
amounts the provider receives from Medicaid reimbursement.
Claims submission timelines . DMH regulations specify that
counties must submit claims for specialty mental health
services within six months, except when there is good
cause. 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 the
state's administratively-established submission deadline of
six months for these claims and, instead, requires counties
to submit claims within the 12-month timeframe specified in
federal Medicaid requirements.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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
$100General/**
expenditures Federal
*Increased federal financial participation
**50 percent General Fund, 50 percent federal funds
SUPPORT : (Verified 8/30/11)
County Mental Health Directors Association (source)
Advanced Medical Technology Association
California Alliance of Child and Family Services
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California Council of Community Mental Health Agencies
California Psychiatric Association
California State Association of Counties
County Alcohol and Drug Program Administrators Association
of California
Los Angeles County Board of Supervisors
National Association of Social Workers, California
Regional Council of Rural Counties
Sacramento County Board of Supervisors
San Mateo County Board of Supervisors
ARGUMENTS IN SUPPORT : The California State Association
of Counties (CSAC) writes 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 GF. CSAC adds that expanding the
timeframe for counties to submit specialty mental health
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.
ASSEMBLY FLOOR : 70-0, 5/12/11
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries,
Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Silva, Skinner, Smyth, Solorio,
Swanson, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Alejo, Cedillo, Conway, Garrick, Gorell,
Roger Hern�ndez, Bonnie Lowenthal, Mitchell, Portantino,
Torres
CTW:kc 8/30/11 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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