BILL ANALYSIS �
AB 2612
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2612 (Dababneh) - As Amended: May 5, 2014
Policy Committee: HealthVote:13-4
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the Department of Health Care Services to
take specified actions relating to mental health and substance
use disorder services in Medi-Cal. Specifically, this bill:
1)Authorizes DHCS to establish a five-year pilot program with
six counties to develop models for housing individuals with
substance use disorder treatments.
2)Requires DHCS to submit an application for any Section 1115
waiver or waiver amendment necessary to create a process by
which federal financial participation (FFP) may be claimed for
stays of 120 days or less in an institution for mental
diseases (IMD) for purposes of substance use disorder
treatment.
3)Requires the department to request a waiver of federal law to
authorize the state to claim FFP for health home services
provided to individuals who are state or county inmates in
their last 30 days in custody in order to ensure coordination
of care and reduce gaps in care.
FISCAL EFFECT
1)Significant costs (GF/federal) to establish a five-year pilot
program with six counties to develop models for housing
individuals with substance use disorder treatments. The pilot
program is not well-specified, but assuming 100 people in six
counties are housed in residential treatment for an average of
four months at a cost of $100 per day, and assuming 65% are
newly eligible, costs of approximately $7 million ($1.5
million GF) annually for five years.
AB 2612
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2)Administrative costs in the range of $500,000 (GF/federal) to
DHCS to develop specified waiver proposals and the pilot
program. Some of these costs may already be incurred, as DHCS
is currently working on a demonstration waiver related to
coordinating substance use services in Drug Medi-Cal.
COMMENTS
1)Purpose . According to the author of this bill, drug or alcohol
abuse and dependency is a significant issue for people in the
criminal justice system. The author states 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.
2)Background . Numerous recent and current initiatives relate to
this bill:
a) 2011 Public Safety Realignment realigned criminal
justice for specified non-serious criminal offenders to
counties. The goal of this policy change was to align
funding and responsibility for this population to a local
level where inmates could be rehabilitated closer to their
communities, and whereby local services, including mental
health and substance abuse treatment and recovery, could be
more effectively coordinated with the criminal justice
system.
b) Medi-Cal Expansion . Pursuant to the Patient Protection
and Affordable Care Act (ACA), California expanded the
Medi-Cal program to all individuals below 133% of the
federal poverty level, effective January 1, 2014. The
state receives 100% federal funding for the first three
years of the expansion for newly eligible enrollees, with
the federal share then gradually decreasing to 90% by 2020.
Pursuant to AB 720 (Skinner), Chapter 646, Statutes of
2013, inmates can retain their status as Medi-Cal eligible
but have their eligibility suspended while incarcerated and
reinstated upon release.
c) Health Home program. AB 361 (Mitchell), Chapter 642,
Statues of 2013 authorizes DHCS to submit a state plan or
Section 1115 waiver amendment to the federal Centers for
Medicare and Medicaid Services for approval to implement a
AB 2612
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"health home program" for individuals with complex
conditions. Health home services include a variety of
coordination and referral services. States that implement
the health home option in their Medicaid program receive a
90% federal matching rate for two years for these services.
d) Drug Medi-Cal Expansion and Waiver . DHCS is currently
developing a Section 1115 demonstration waiver proposal to
provide the Drug Medi-Cal benefit in a coordinated manner,
modeled after the mental health benefit provided by county
mental health plans. Demonstration waivers allow the state
to waive certain federal rules, as long as services are
provided in an effective way without increasing costs. As
part of this effort, DHCS is reportedly pursuing a waiver
of federal Institution for Mental Diseases (IMD) exclusion"
rules, which prohibit federal funding for inpatient mental
health services in facilities of more than 16 beds. In
addition, DHCS is seeking to expand residential treatment
as a benefit for all enrollees through this waiver.
3)Staff Comments . The confluence of changes described above
present opportunities for the state and local governments to
optimize management of the population involved with the
criminal justice system and suffering from mental health and
substance use disorders. Indeed, much work is ongoing. It
appears that provisions (1) and (2) described in the summary
above, relating to residential treatment and a potential
waiver of the federal IMD exclusion, are being pursued by DHCS
as part of a Section 1115 waiver related to Drug Medi-Cal.
The health home services referenced in section (3) of the
summary are services that would be offered pursuant to a
program that is authorized, but has not yet been developed.
It is unclear whether DHCS is contemplating pursuing federal
financial participation for offering health home services to
state or county inmates in their last 30 days in custody, but
staff notes this may have the potential to encourage the
provision of care coordination by reducing costs of providing
these services, if such a waiver was granted.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081