BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1967
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     AB 1967 (Pan) - As Amended:  April 10, 2014 

          Policy Committee:                              HealthVote:19-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill requires the Department of Health Care Services  
          (DHCS), if it commences or concludes an investigation of a Drug  
          Medi-Cal provider, to notify counties that contract with the  
          provider.

           FISCAL EFFECT  

          Negligible state fiscal effect.  DHCS has already committed to  
          improved communication with counties for purposes of program  
          integrity in the Drug Medi-Cal program.

           COMMENTS  

           1)Purpose  . According to the author, this bill is intended to  
            improve oversight and prevent fraud in the Drug Medi-Cal  
            program by requiring the state to share information with  
            counties related to providers under investigation.  In  
            September 2013 the Assembly Health Committee and Assembly  
            Accountability and Administrative Review Committee held a  
            joint oversight hearing to examine fraud in the Drug Medi-Cal  
            program.  One issue highlighted at the hearing was the lack of  
            information sharing between the state and county entities that  
            are responsible for monitoring and auditing clinics.  In  
            particular, counties expressed a concern that individuals who  
            were being investigated in one county could simply move  
            operations to a new county in order to avoid further  
            investigation. 

           2)Background  .  Drug Medi-Cal services are reimbursed on a  
            fee-for-service basis at maximum rates set by the state.   
            Prior to this year, services included outpatient drug-free  








                                                                  AB 1967
                                                                  Page  2

            services, which consist mostly of group counseling and some  
            limited individual counseling for people in crisis, and   
            narcotic treatment programs, which provide methadone  
            replacement therapy. There were about 800 active Drug Medi-Cal  
            providers in the state providing these services. 

            Drug Medi-Cal is also expanding services. As of January 1 of  
            this year, intensive outpatient services, residential  
            services, and inpatient detoxification are available to the  
            general population.  After recent allegations in the media of  
            systemic fraud in the Drug Medi-Cal system, DHCS conducted a  
            special review of Drug Medi-Cal, suspending numerous providers  
            and referring some to the Department of Justice.  DHCS  
            indicates additional Drug Medi-Cal program integrity efforts  
            are ongoing. 




           3)Related Legislation . 

             a)   AB 1644 (Medina) requires Drug Medi-Cal providers to be  
               designated as a 'high' categorical risk and be subject to  
               criminal background checks as a condition of Drug Medi-Cal  
               certification.  AB 1644 is being heard today in this  
               committee.

             b)   SB 1339 (Cannella) requires a county or DHCS, before  
               contracting with a Drug Medi-Cal provider, to obtain  
               criminal background checks for the owner and key staff.  SB  
               1339 is pending in the Senate.

             c)   SB 1045 (Beall) decreases, from four to two, the minimum  
               number of participants in a group counseling session  
               provided by certain Drug Medi-Cal providers and eliminates  
               the maximum of 10 participants.  SB 1045 is pending in the  
               Senate.  

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081