BILL ANALYSIS �
AB 2612
Page 1
Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 2612 (Dababneh) - As Amended: March 28, 2014
SUBJECT : Medi-Cal: substance use disorder treatment.
SUMMARY : Requires the Department of Health Care Services (DHCS)
to request a federal waiver to receive federal financial
participation (FFP) under the Medi-Cal program for residential
substance use disorder treatment in institutions for mental
diseases (IMDs); requires DHCS to establish a pilot program to
develop models for housing individuals with substance use
disorders; and requires DHCS to request a federal waiver to
allow behavioral health services providers, as specified, to be
a health home. Specifically, this bill :
1)Authorizes eligible individuals who are not inmates of a
public institution to access medically necessary Drug Medi-Cal
benefits. This provision is intended to clarify existing law.
2)Allows DHCS to establish a 10-year pilot program with six
counties to develop models for housing individuals with
substance use disorders to provide substance use disorder
treatment to those individuals who do not fall within the
institution for mental diseases exclusion in federal law,
thereby maximizing FFP. Prohibits this authority from
creating a state-only funded benefit or program. Requires
this pilot program to be implemented only to the extent that
FFP is not jeopardized.
3)Requires DHCS to include in a federal waiver, as specified, a
request for approval to create a process by which counties may
receive FFP for stays of 90 days or less in an institution for
mental diseases, as defined under federal law, for treatment
of an individual's medically necessary substance use disorder.
Makes this requirement conditional upon federal approval of
the waiver.
4)Requires DHCS to request a waiver of federal law to authorize
counties to designate a provider of behavioral health
services, including a nonhospital facility that would
otherwise be designated as an institution for mental diseases,
as a health home. Makes this requirement conditional upon
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federal approval of the waiver.
EXISTING LAW :
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income persons receive health care
benefits. Medi-Cal is California's version of the federal
Medicaid program and is jointly funded by the state and
federal government.
2)Establishes the Drug Medi-Cal program, which provides
substance use disorder services to Medi-Cal recipients.
3)Allows DHCS to enter into contracts with counties for the
provision of Drug Medi-Cal services. If a county declines to
contract with DHCS, existing law requires DHCS to contract for
services in the county to ensure beneficiary access.
4)Requires each county to fund the nonfederal share for Drug
Medi-Cal services through realignment funds, as specified.
5)Requires providers of Drug Medi-Cal services to obtain
certification from DHCS to provide those services.
6)Requires DHCS to adopt emergency regulations governing the
Drug Medi-Cal program by July 1, 2014.
7)Under federal law, excludes IMDs from federal reimbursement in
the Medicaid program for services provided to individuals aged
22 to 65, as specified. Defines, under federal law, the term
IMD to mean a hospital, nursing facility, or other institution
of more than 16 beds, that is primarily engaged in providing
diagnosis, treatment, or care of persons with mental diseases,
including medical attention, nursing care, and related
services.
8)Establishes the Mentally Ill Offender Crime Reduction Grant
Program (MIOCRG), which awards grants on a competitive basis
to counties that expand or establish strategies for curbing
recidivism among mentally ill offenders.
9)Authorizes counties to designate entities to assist county
jail inmates with submitting an application for a health
insurance affordability program.
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FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author of this bill,
drug or alcohol abuse and dependency is a significant issue
for people in the criminal justice system. Data collected in
2009 by the Office of National Drug Control Policy's Arrestee
Drug Abuse Monitoring program showed that males 18 years and
older in the justice system tested positive for recent use of
drugs and admitted to that use in far higher rates than the
general population, with nearly 80% of arrestees in Sacramento
testing positive for the presence of at least one drug. Over
half of women in jail and 44% of men in jail have a drug or
alcohol dependency. Left untreated, these issues can act as a
driver of crime.
Until recently, most of the jail inmates population did not
have access to health coverage - up to 90% were uninsured in
one survey of the San Francisco jail population. Recent
changes in federal and California law under the federal
Patient Protection and Affordable Care Act (ACA) have expanded
coverage to this population, creating new opportunities for
coverage for drug treatment programs. However, because
federal law prohibits federal reimbursement for residential
drug treatment in IMDs, there is a dearth of available
residential substance use disorder treatment beds. The author
states that this bill would help counties create innovative
ways to access Drug Medi-Cal and would seek a specific waiver
of the IMD exclusion for residential substance use disorder
treatment less than 90 days.
2)BACKGROUND . Drug Medi-Cal services are reimbursed on a
fee-for-service basis at rates set by the state, and are not
provided through Medi-Cal managed care plans. These services
are carved out from the regular Medi-Cal program: they are
delivered by a specialized system of providers certified by
the state rather than through participating physicians or
health plans. Drug Medi-Cal services include outpatient drug
free services, which consist mostly of group counseling and
some limited individual counseling for persons in crisis;
narcotic treatment programs, which provide methadone
replacement therapy; intensive outpatient services; and
residential services. There are about 800 active Drug
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Medi-Cal providers in the state.
In 2013, the Legislature passed SB 1 X1 (Ed Hernandez, Chapter
4, Statutes of 2013-14 First Extraordinary Session), which
exercised the state option to expand Medi-Cal eligibility
under the ACA to include single adults with incomes up to 138%
of the federal poverty level. In addition, SB 1 X1 required
Medi-Cal to cover substance use disorder services covered
under the state's essential health benefit package. Due to
this change, DHCS submitted a state plan amendment (SPA) that
included an expansion of residential and intensive outpatient
services under Drug Medi-Cal, which were previously available
to limited populations (e.g., pregnant and perinatal women),
to include all Medi-Cal enrolled adults in the state.
However, DHCS indicates that it had to remove the residential
services benefit from the SPA due to the IMD exclusion. The
SPA is still under review with the Centers for Medicare and
Medicaid Services (CMS).
3)IMD EXCLUSION . Beginning in the mid-1950s, when treatment
advances made it possible for many people with mental illness
to be effectively treated in an outpatient setting, a movement
away from institutionalization, toward community-based
treatment in the least restrictive environment and the
establishment of community mental health centers began. Since
the Medicaid program was established in 1965, the program has
excluded payments for inpatient care for adults in mental
institutions, which came to be known as IMDs. The payment
exclusion does not apply to inpatient treatment for mental
illnesses in facilities that are part of larger medical
entities that are not primarily engaged in the treatment of
mental illnesses (generally tested by whether the majority of
the patient population was admitted and treated for reasons
other than mental illness), such as general hospitals or
skilled nursing facilities.
In 1988, Congress further defined an IMD as a facility with
more than 16 beds, apparently to promote small,
community-based group living arrangements as an alternative to
large institutions. The result of these amendments is that
Medicaid currently provides mental health treatment coverage
for a large percentage of people with Medicaid, but that
coverage is excluded for inpatient treatment of adults aged 21
to 64 in any acute or long-term care institutions with 17 or
more beds that are primarily engaged in providing treatment
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for mental illnesses. This payment exclusion became known as
the Medicaid IMD exclusion.
4)DRUG MEDI-CAL WAIVER . The U.S. Secretary of Health and Human
Services, under Section 1115 of Social Security Act, has broad
authority to waive provisions of the Medicaid statute to allow
states to institute demonstration projects and provide federal
funding for activities that would not normally be eligible
under federal law. To avoid Congressional approval, these
waivers must be budget neutral over the life of the waiver,
meaning that they cannot cost the federal government more than
it would normally pay through Medicaid in the absence of the
waiver. Waivers allow states some measure of flexibility to,
for example, institute new systems of care delivery, service
eligibility for non-Medicaid eligible populations, or provide
services that may not be a covered benefit under Medicaid.
All waivers are subject to approval by the Centers for
Medicare and Medicaid Services, the Office of Management and
Budget, and the Department of Health and Human Services.
DHCS announced in January 2014 that it is seeking a waiver from
CMS to operate the Drug Medi-Cal program as an organized
delivery system modeled after the county specialty mental
health system. DHCS indicates the waiver will give state and
county officials more authority to select quality providers to
meet drug treatment needs. The waiver is intended to achieve
integration through coordination by building upon the county
mental health system. It is also intended to improve program
integrity. In addition, in light of the removal of the
residential benefit expansion in Drug Medi-Cal from the SPA,
DHCS has indicated that it will pursue the residential benefit
through the waiver process.
5)MEDI-CAL ELIGIBILITY FOR INCARCERATED INDIVIDUALS . Federal
guidance indicates that, while states cannot claim Medicaid
funding for services furnished to people who are incarcerated,
it is not a federal requirement that Medicaid eligibility be
terminated while individuals are in jail. Instead, a state
may place the person in suspended status and return the
individual to active Medicaid eligibility upon release from
jail (including release to parole or probation). In 2004, CMS
issued a State Medicaid Director Letter to clarify this
federal policy. Instead of terminating Medicaid eligibility,
CMS urged states to establish a process under which an
eligible inmate is placed in a suspended status so that the
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state does not claim FFP for services the individual receives,
but the person remains on the state's rolls as being eligible
for Medicaid (assuming the person continues to meet all
applicable eligibility requirements). Once discharge from the
facility is anticipated, the state should take whatever steps
are necessary to ensure that an eligible individual is placed
in payment status so that he or she can begin receiving
Medicaid-covered services immediately upon leaving the
facility.
AB 720 (Skinner), Chapter 646, Statutes of 2013, established
authority for counties to designate entities to assist county
jail inmates with submitting applications for Medi-Cal and
other health insurance affordability programs. AB 720 was
intended to result in greater numbers of former inmates being
enrolled in comprehensive health care coverage, thereby
increasing access to substance use disorder and mental health
services that are likely to reduce recidivism rates for this
population in the long-run.
6)MENTALLY ILL OFFENDER CRIME REDUCTION GRANT PROGRAM . The
Legislature passed SB 1485 (Rosenthal), Chapter 59, Statutes
of 1989, establishing the MIOCRG program. Under SB 1485, the
Board of Corrections (now the Board of State and Community
Corrections) awarded grants to support the development,
implementation, and evaluation of projects that demonstrated
locally identified strategies for reducing recidivism among
mentally ill offenders. Before the program was defunded in
2008, MIOCRG-funded projects delivered targeted, enhanced
services or interventions while fostering interagency
collaboration between mental health and criminal justice
agencies.
An evaluation of the MIOCRG program in 2005 indicated
generally favorable outcomes: program participants were: a)
more comprehensively diagnosed and evaluated regarding their
mental functioning and therapeutic needs; b) more quickly and
reliably provided with services designed to ameliorate the
effects of mental illness; c) provided with more complete
after-jail systems of care designed to ensure adequate
treatment and support; and d) monitored more closely to ensure
that additional illegal behavior, mental deterioration, and
other areas of concern were quickly addressed. Fewer
participants served time in jail and, when they did serve
time, they were in jail for fewer days. Participants improved
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in quality of life outcomes, including reduced substance use
and abuse, having housing, and economic self-sufficiency.
Although some of the projects emphasized enhanced in-custody
services, such as counseling and discharge planning, the
majority of projects involved a combination of in-custody and
post-custody interventions. The enhanced community-based
services offered by the projects included residential or
outpatient mental health treatment; assistance in securing
disability entitlements, housing, vocational training, and
employment; individual and group counseling; life skills
training; substance abuse education and counseling; medication
education, management and support; crisis intervention; and
advocacy.
7)MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION . The ACA
provides authority for states to participate in a three year
Medicaid Emergency Psychiatric Demonstration which allows
federal reimbursement for certain emergency services provided
to eligible Medi-Cal beneficiaries ages 21-64 in IMDs under
specified conditions. DHCS invited all counties with private
IMDs to participate in the demonstration; Sacramento and
Contra Costa counties volunteered and began enrolling Medicaid
beneficiaries between the ages of 21 and 64 who reside in
Sacramento or Contra Costa County and are suicidal or
homicidal or a threat to self or others. Contra Costa County
will also enroll individuals who are eligible for Medicaid at
the time of admission and subsequently enroll in Medicaid.
Before the demonstration, the counties paid participating IMDs
for providing inpatient care to this population but, due to
the IMD exclusion, they did not receive federal matching funds
for services.
8)HEALTH HOMES . Health homes are a new Medicaid state plan
option created under the ACA, with the overall goal to improve
integration across physical health, behavioral health, and
long term services and supports. Health homes provide a way
to pay for difficult to reimburse services like care
management and care coordination. Health Home services
include comprehensive care management, care coordination,
health promotion, comprehensive transitional care, individual
and family support, and referral to community and social
support services. All six services must be provided. States
that implement the health home option in their Medicaid
program receive a 90% federal matching rate for two years for
these services.
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The ACA defines the individuals eligible for health home
services as individuals meeting one of the following: a)
having at least two chronic conditions, including asthma,
diabetes, heart disease, obesity, mental condition, and
substance abuse disorder; b) having one chronic condition and
are at risk of having a second chronic condition; or c) having
one serious and persistent mental health condition. The ACA
further provides guidelines on designated home providers,
including a physicians, clinics, community mental health
centers, home health agencies, or other providers that meet
state and federal standards. Health home services can also be
provided by teams that may include nurse care coordinators,
nutritionists, social workers, behavioral health
professionals, or other professionals.
The Legislature passed AB 361 (Mitchell), Chapter 642, Statues
of 2013, which authorizes DHCS to submit a SPA or Section 1115
waiver amendment to the federal Centers for Medicare and
Medicaid Services for approval to implement a health home
program.
9)SUPPORT . Californians for Safety and Justice, the sponsor of
this bill, writes that the availability of substance use
disorder treatment is of particular import to people in the
criminal justice system. Studies have shown up to 90% of the
individuals that cycle in and out of the justice system do not
have health insurance and suffer significantly higher
prevalence of substance use disorders. When these underlying
drivers of crime remain undetected or untreated, the behaviors
of people in the justice system often remain the same or
worsen, contributing to recidivism and high costs in the
justice system. By seeking a waiver to allow for FFP for
residential substance use disorder treatment, the sponsor
argues, we can help stop the cycle of crime. The sponsor
notes increased health care enrollment for individuals in the
justice system has demonstrated positive results in other
jurisdictions: a 2009 California Department of Corrections and
Rehabilitation report showed a 61% recidivism reduction for
female inmates accessed substance abuse treatment and a 29%
reduction for male inmates who accessed such treatment.
10)RELATED LEGISLATION .
a) AB 361 (Mitchell), Chapter 642, Statutes of 2013,
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authorizes the DHCS to submit a SPA or Section 1115 waiver
amendment to the federal Centers for Medicare and Medicaid
Services for approval to implement a health home program.
b) AB 720 (Skinner), Chapter 646, Statutes of 2013,
authorizes counties to designate entities to assist county
jail inmates with submitting applications for health
insurance affordability programs
c) SB 1054 (Steinberg) restores the MIOCRG program and
appropriates $50 million in 2014-15 to fund the program.
11)PREVIOUS LEGISLATION .
a) AB 1066 (John A. P�rez), Chapter 86, Statutes of 2011,
enacts technical and conforming statutory changes necessary
to implement the Special Terms and Conditions required by
the CMS in the approval of the Section 1115 Medi-Cal
Demonstration Project entitled "California's Bridge to
Reform," approved on November 2, 2010.
b) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
implements provisions of the 2010 Section 1115 Bridge to
Reform waiver.
12)PROPOSED AUTHOR'S AMENDMENTS . The author has proposed
several amendments to this bill.
a) Intent language. The author has proposed intent
language that provides background on the Medi-Cal expansion
under the ACA and states intent to encourage the use of
appropriate residential substance use disorder treatment
programs for individuals in the criminal justice system.
b) Eligibility clarification. This bill includes language
that clarifies that individuals who are otherwise eligible
for Medi-Cal and who are not inmates of a public
institution may access Medi-Cal benefits. The author has
proposed moving this clarification to legislative intent
language.
c) Health Homes. The author has proposed to amend this
bill to remove the provision related to designating an IMD
as a health home and instead to require DHCS to request a
federal waiver to allow the state to claim FFP for health
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home services provided to otherwise eligible individuals
who are state or county inmates in their last 30 days in
custody. These proposed amendments require these services
to consist only of care management, care coordination,
transitional care, individual and family support, referral
to community supports, and health information technology
for purposes of eligibility and service linkage, and not to
include any health care services.
d) Technical amendments. The author has proposed several
technical amendments. For example, the author has deleted
provisions that made implementation of requirements for
DHCS to submit a waiver conditional upon approval of that
waiver.
e) Duration of residential services provided in an IMD.
The author has proposed that the maximum length of stay in
an IMD be increased from 90 days to 120 days.
REGISTERED SUPPORT / OPPOSITION :
Support
Californians for Safety and Justice
Opposition
None on file.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097