BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2612
AUTHOR: Dababneh
AMENDED: May 23, 2014
HEARING DATE: June 18, 2014
CONSULTANT: Bain
SUBJECT : Medi-Cal: substance abuse disorder treatment.
SUMMARY : Requires the Department of Health Care Services (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 Disease for
beneficiaries with a substance use disorder diagnosis. Requires
DHCS, in implementing the California Health Home Program
authorized under federal health care reform, to request a waiver
of federal law to authorize the state to claim FFP for health
home services provided to individuals, who are otherwise
eligible to receive health home services and who are state or
county inmates in their last 30 days in custody.
Existing law:
1.Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services. The Medi-Cal program is, in part, governed and
funded by federal Medicaid provisions.
2.Excludes, under federal Medicaid law, FFP for any payments for
care or services for an individual under age 65 and who is a
patient in an institution for mental diseases (IMD). This is
known as the "IMD exclusion."
3.Defines an IMD, under federal law, as 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.
4.Establishes specified Drug Medi-Cal (DMC) reimbursable
services for Medi-Cal beneficiaries. Requires, effective
January 1, 2014, Medi-Cal to provide coverage for additional
mental health and substance use disorder services included in
the essential health benefits (EHB) package adopted by
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California (the state adopted the Kaiser Small Group Product
as the state's EHB for the individual and small group health
insurance market last session).
5.Authorizes, under the federal Patient Protection and
Affordable Care Act (ACA) (Public Law 111-148), as amended by
the Health Care Education and Reconciliation Act of 2010
(Public Law 111-152), states to offer health home services, as
defined, to eligible individuals with chronic conditions who
select a designated provider, a team of health care
professionals operating with such a provider, or a health team
as the individual's health home for purpose of providing the
individual with health home services. Provides, under the ACA,
90 percent federal matching funds for the first eight quarters
the health home option is in effect. Thereafter, the state's
regular federal matching rate would be in effect (typically 50
percent in California).
6.Authorizes DHCS to take specified actions in creating a
California Health Home Program (Health Home Program), as
authorized under the ACA, including designing a program,
contracting with providers, defining the eligible populations,
developing a payment methodology, identifying the specific
health home services needed for each population, and
submitting any State Plan Amendments or waivers to the federal
government.
This bill:
1.Requires DHCS to submit an application for any Section 1115
waiver or waiver amendment necessary to create a process by
which FFP may be claimed for stays of 120 days or less in an
IMD for beneficiaries with a substance use disorder diagnosis
for purposes of treating the individual's diagnosed substance
use disorder.
2.Requires DHCS, in implementing the Health Home Program, to
request a waiver of federal law to authorize the state to
claim FFP for health home services provided to individuals,
who are otherwise eligible to receive health home services
under the program and who are state or county inmates in their
last 30 days in custody, by a provider or team of providers,
to ensure coordination of care and reduce gaps in care. Limits
pre-release health home services to case management, care
coordination and health promotion, comprehensive transitional
care, individual and family support, referral to community and
social services supports, and health information technology,
and excludes health care services.
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3.Makes legislative findings regarding the ACA, the Medi-Cal
expansion under the ACA, the additional substance use disorder
benefits under Medi-Cal and associated federal funding, and
the substance use disorder treatment needs of individuals
being released from jails.
4.States legislative intent to encourage the use of appropriate
residential substance use disorder treatment programs for
individuals in the criminal justice system and to increase
access to primary care, mental health treatment, and substance
use disorder treatment for individuals in the criminal justice
system, and that Medi-Cal eligible individuals are eligible
for Medi-Cal benefits, including individuals in formal or
informal diversion or deferred entry of judgment programs,
individuals on probation, individuals on parole, individuals
on post-release community supervision, and individuals on
mandatory supervision.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has administrative costs in the range of
$500,000 (General Fund/federal) to DHCS to develop specified
waiver proposals and 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.
PRIOR VOTES :
Assembly Health: 13- 4
Assembly Appropriations:12- 0
Assembly Floor: 69- 1
COMMENTS :
1.Author's statement. According to the author, drug or alcohol
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 people 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 percent of arrestees in Sacramento testing positive
for the presence of at least one drug. Left untreated, these
issues can act as a driver of crime. Until recently, many jail
inmates did not have access to health coverage - up to 90
percent in one survey of the San Francisco jail population.
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Recent changes in federal and California law under the ACA has
expanded coverage to this population, creating new
opportunities for coverage for drug treatment programs.
Because of the IMD exclusion and the lack of Medi-Cal coverage
for residential drug treatment, there is a significant deficit
in available residential substance use disorder treatment
beds. This bill would seek a specific waiver of the IMD
exclusion for residential substance use disorder treatment
less than 120 days, and to allow health home coordination in
the last 30 days of incarceration.
2.Background on federal funding exclusions. FFP is not available
for services furnished to people who are incarcerated (except
when outside the grounds of the correctional institution) or
for individuals served in an IMD. The IMD exclusion prohibits
FFP from being available for any medical assistance under
federal Medical law for services provided to any individual
who is under age 65 who is a patient in an IMD unless the
payment is for inpatient psychiatric services for individuals
under age 21. The IMD exclusion was designed to ensure that
states, rather than the federal government, continue to have
principal responsibility for funding inpatient psychiatric
services. Under this broad exclusion, no Medicaid payment can
be made for services provided either in or outside the
facility for IMD patients in this age group. The IMD exclusion
is unusual in that it is one of the very few instances in
which federal Medicaid law prohibits FFP for care provided to
enrolled beneficiaries.
3.Federal Health Homes for Enrollees with Chronic Conditions.
The ACA contained several provisions to support and advance
the medical home model of care. One of these was entitled
"State Option to Provide Health Homes for Enrollees with
Chronic Conditions," which established a waiver program to
give states the option of enrolling Medicaid beneficiaries
with chronic conditions into a health home. States electing
the health home option in their Medicaid program would receive
a 90 percent federal matching rate for two years for these
services. Federal law defines the individuals eligible for
health home services as individuals meeting one of the
following:
a. Having at least two chronic conditions;
b. Having one chronic condition and are at risk of
having a second chronic condition; or,
c. Having one serious and persistent mental health
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condition.
Federal law defines "health home services" as services
provided by a designated provider, a team of health care
professionals operating with such a provider, or a health team
that provides:
a. Comprehensive care management;
b. Care coordination and health promotion;
c. Comprehensive transitional care, including
appropriate follow-up, from inpatient to other
settings;
d. Patient and family support (including authorized
representatives);
e. Referral to community and social support services, if
relevant; and,
f. Use of health information technology to link services,
as feasible and appropriate.
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
(CMS) for approval to implement the Health Home Program.
1.Medicaid waivers. When DHCS wants to make significant changes
to its Medicaid program, it must amend its State Medicaid Plan
(the State's contract with the federal government), and (if
needed) receive an exemption or Medicaid waiver from portions
of federal Medicaid law. California has used Medicaid waivers
to provide additional services to specific groups of
individuals who were not eligible for FFP, to limit services
to specific geographic areas of the state, and provide medical
coverage to individuals who may not otherwise be eligible
under Medicaid rules. An example of a provision of Medicaid
law that is waived is the federal "freedom of choice"
requirements. Waiving this requirement allows California to
require Medi-Cal beneficiaries to receive benefits through
managed care plans.
The criteria used by the federal government for approval of
Medicaid waivers are generally based upon policy, rather than
solely on federal law. The most significant federal
requirement is that of cost-effectiveness or budget
neutrality. The proposed waiver changes must not cost the
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federal government more than the expected Medicaid costs for
the traditional Medicaid population under the same time
period.
a. Section 1915 waivers must not exceed
fee-for-service equivalent costs. These waivers do
not need to result in cost savings to be budget
neutral during the waiver period as long as the costs
do not exceed the federal fee-for-service equivalency.
b. Section 1115 waivers must demonstrate that
actual costs will be reduced or the rate of growth in
spending will be slower over the period of the waiver
than it would be without the waiver (this bill
requires DHCS to seek a Section 1115 waiver).
1.State DMC waiver proposal. DHCS will be requesting a waiver
from CMS to operate DMC as an organized delivery system. DHCS
states the waiver will give state and county officials more
authority to select quality providers to meet drug treatment
needs. DHCS indicates the waiver will support coordination and
integration across systems, increase monitoring of provider
delivery of services, and strengthen county oversight of
network adequacy, service access, and standardized practices
in provider selection.
DHCS indicates its proposed waiver will only be operational in
counties that elect to opt into this organized delivery system
for DMC. Counties that opt into this waiver will be required
to meet specified requirements, including implementing
selective provider contracting (selecting which providers
participate in the program), providing all DMC benefits,
monitoring providers based on performance criteria, ensuring
beneficiary access to services and an adequate provider
network, using a single-point of access for beneficiary
assessment and service referrals, and data collection and
reporting.
2.Expansion of Drug Medi-Cal benefits and the IMD Exclusion. As
part of the implementation of federal health care reform last
year, the DMC benefit was expanded to require Medi-Cal to
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provide coverage for additional substance abuse disorder
services. These additional benefits included services in the
EHB adopted by the state, and an additional preventive
service. Effective January 1, 2014, eligible Medi-Cal
beneficiaries may receive these expanded substance use
disorder services:
a. Intensive Outpatient Treatment: Currently a
DMC benefit, but previously limited to pregnant and
postpartum women, children, and youth under the age of
21. This service is now available for the overall
Medi-Cal population;
b. Residential Substance Use Disorder Benefit:
Currently a DMC benefit, but previously limited to
pregnant and postpartum women. This service is now
available for the overall Medi-Cal population;
c. Voluntary Inpatient Detoxification: This
service will be available to the general population
and is not limited to individuals with a medical
condition; and,
d. Screening and Brief Intervention: This service
will be available to the Medi-Cal adult population for
alcohol misuse, and if threshold levels indicate, a
brief intervention is covered. This service would
occur in primary care settings.
In February 2014, the DHCS Director wrote to CMS regarding
California's ability to provide the Residential Substance Use
Disorder Benefit as California proposed in its State Plan
Amendment. DHCS requested that CMS employ an interpretation of
the IMD exclusion that does not rely solely on the number of
beds. DHCS requested that CMS instead recognize the
distinguishing characteristics of the proposed benefit and the
realities faced in providing this service as the number of
beds (licensed capacity of 18,155 beds) available for Medi-Cal
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beneficiaries would be only 10 percent of total capacity
(1,815), assuming full provider capacity.
1.Related legislation. SB 1161 (Beall), requires DHCS to seek a
waiver of the federal Medicaid law prohibition against federal
matching funds being available for services provided in an IMD
so as to provide short-term residential treatment in
facilities with bed capacities in excess of 16 beds meeting
specified criteria, and short-term inpatient medical
detoxification in a free-standing acute psychiatric and
chemical dependency recovery hospital. SB 1161 is scheduled
for hearing in the Assembly Health Committee on June 17th.
2.Prior legislation. AB 106 (Committee on Budget), Chapter 32,
Statutes of 2011, a budget trailer bill, transferred
California's DMC program from DADP to DHCS, effective July 1,
2012.
3.Support. Californians for Safety and Justice (CSJ), the
sponsor of this bill, writes that this bill would alleviate
barriers for substance use disorder treatment by seeking a
waiver from the CMS to allow FFP for short-term residential
substance use disorder treatment, and to allow FFP for Health
Home coordination activities during the last 30 days of a
period of incarceration. CSJ argues the availability of
substance use disorder treatment is of particular importance
to people in the criminal justice system. CSJ states studies
have shown up to 90 percent 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 SUD treatment, the
state can help stop the cycle of crime. CSJ argues increased
health care enrollment for individuals in the justice system
has already demonstrated positive results in other
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jurisdictions. A 2009 California Department of Corrections and
Rehabilitation report showed a 61 percent recidivism reduction
for female inmates who accessed substance abuse treatment and
a 29 percent reduction for male inmates who accessed such
treatment. CSJ concludes that this bill goes a long way to
address the long-standing challenges caused by the prevalence
of uninsured individuals with SUD in the justice system.
4.Policy issues:
a. DHCS waiver authority. As indicted above, DHCS is
pursuing a broader Section 1115 relating to DMC. Section
2 of this bill is drafted as a waiver of the IMD
exclusion. DHCS' current authority to seek a broader
Section 1115 waiver is an area of dispute between
legislative staff and the Administration. DHCS cites as
its current law authority a provision of existing law
that requires DHCS to prepare and submit amendments to
its Medicaid state plan and apply for any necessary
waivers in order to obtain FFP to implement DMC treatment
program provisions. DHCS argues this provision enables it
to seek a broader waiver, while legislative staff and
have argued that the waiver provision is limited to
obtaining FFP, and a Section 1115 waiver can be used to
obtain FFP but that the other changes DHCS seeks as part
of the waiver (such as selective provider contracting)
are not necessary to obtain FFP.
b. IMD waiver limited to substance use disorder
benefit. The IMD exclusion applies to 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. As drafted, the
IMD exclusion waiver request under this bill is drafted
for the treatment of substance use disorders in the DMC
body of law.
c. Should IMD waiver length of stay be specified in
statute requesting a waiver? This bill requires DHCS to
submit an application for an IMD waiver for stays of 120
days or less in an IMD. The difference between this bill
and SB 1161 related to the IMD exclusion is SB 1161
specifies "short-term" residential treatment, while AB
2612 specifies 120 days or less. When SB 1161 was heard
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in Senate Health Committee, it specified short-term
residential treatment in facilities with bed capacities
in excess of 16 beds, 30 to 90 days maximum, with an
average length of stay of 60 days. SB 1161 was amended
out of committee to delete the 30 to 90 days maximum and
60 day average length of stay reference, so the bill
referred to "short term" residential treatment so as to
not limit DHCS from obtaining FFP for residential stays
of a longer duration. The sponsor of this bill indicates
the 120 day limit is designated to allow for a sufficient
period to allow for effective treatment but not to lead
to long-term institutionalization.
SUPPORT AND OPPOSITION :
Support: Californians for Safety and Justice (sponsor)
Oppose: None received
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