BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 1161
Author: Beall (D), et al.
Amended: 8/22/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 4/24/14
AYES: Hernandez, Morrell, Beall, DeSaulnier, Evans, Monning,
Wolk
NO VOTE RECORDED: De Le�n, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 6-1, 5/23/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NOES: Walters
SENATE FLOOR : 32-4, 5/27/14
AYES: Anderson, Beall, Berryhill, Block, Cannella, Corbett,
Correa, De Le�n, DeSaulnier, Evans, Gaines, Galgiani, Hancock,
Hernandez, Hill, Hueso, Huff, Jackson, Lara, Leno, Lieu,
Mitchell, Monning, Nielsen, Padilla, Pavley, Roth, Steinberg,
Torres, Vidak, Wolk, Wyland
NOES: Fuller, Knight, Morrell, Walters
NO VOTE RECORDED: Calderon, Liu, Wright, Yee
ASSEMBLY FLOOR : 76-1, 08/27/14 - See last page for vote
SUBJECT : Drug Medi-Cal
SOURCE : California Association of Alcohol and Drug Program
Executive, Inc.
Californians for Safety and Justice
County Behavioral Health Directors Association of
CONTINUED
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California
DIGEST : This bill requires the Department of Health Care
Services (DHCS), if it seeks a waiver of federal law regarding
the Drug Medi-Cal (DMC) program, to pursue federal approvals to
address the need for greater capacity in both short-term
residential treatment facilities and hospital settings providing
short-term voluntary inpatient detoxification service.
Assembly Amendments narrow the provisions of this bill by
deleting the requirement for DHCS to seek a Section 1115 waiver
and Institution for Mental Disease (IMD) exclusion for standing
acute psychiatric hospitals, and instead specify the need for
greater capacity to be addressed by DHCS if it chooses to seek a
waiver of federal law regarding the DMC program, add a
co-author, and make other technical changes.
ANALYSIS :
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, federal financial
participation (FFP) for any payments for care or services for
an individual under age 65 and who is a patient in an 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 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 (EHBs) package adopted by California (the state
adopted the Kaiser Small Group Product as the state's EHBs for
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the individual and small group health insurance market).
This bill:
1.Requires DHCS, if it seeks a federal waiver in order to obtain
FFP in the DMC program under existing law, to pursue federal
approvals to address the need for greater capacity in both
short-term residential treatment facilities and hospital
settings for short-term voluntary inpatient detoxification,
including, but not limited to, licensed chemical dependency
recovery hospitals.
2.Prohibits this bill from being construed to limit the
authority of DHCS to seek a waiver to obtain FFP to implement
DMC.
3.Requires this bill to be implemented only to the extent
federal approvals are obtained and to the extent that FFP is
available.
4.States legislative intent to expeditiously expand statewide
capacity for mental health and substance use disorder
treatment services for all Californians eligible for health
care services under Medi-Cal who are in need of, or are
currently seeking, treatment.
5.Makes the following legislative findings and declarations:
A. The federal Patient Protection and Affordable Care Act
(ACA) offers previously uninsured Californians
unprecedented access to health services, including mental
health and substance use disorder services.
B. In 2013, the Legislature passed AB 1 and SB 1 in the
2013-14 First Extraordinary Session, which expanded
Medi-Cal coverage to low-income adults with incomes at or
below 138% of the federal poverty level who were not
previously eligible, established the Medi-Cal benefit
package for this expansion population, and required the
Medi-Cal program to cover additional mental health and
substance use disorder services.
C. An estimated 1.2 million people enrolled in the Medi-Cal
program have substance use treatment needs.
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D. Substance use disorder treatment often requires medical
detoxification and residential treatment services, services
that have been included in California's Medi-Cal expansion
under the ACA.
E. The federal exclusion for IMDs only permits residential
care for substance use disorder in facilities with 16 beds
or fewer and medical detoxification only in a general acute
care hospital, making both services inaccessible to
Medi-Cal and DMC beneficiaries.
F. Capacity for both medical detoxification and residential
treatment is severely limited in California in settings in
compliance with the federal exclusion for IMD.
G. According to a letter from the Director of DHCS to the
federal Centers for Medicare and Medicaid Services, only
21% of California's beds are in facilities with a capacity
of 16 and under. Furthermore, other than 11 perinatal
programs, there are no DMC licensed residential substance
use disorder facilities in California. Therefore,
California is severely limited in providing the expanded
substance use disorder residential treatment benefits as
provided for by the Medi-Cal expansion.
H. The Commonwealth of Massachusetts successfully included
IMD expenditure authority in its Section 1115 waiver.
California has a similar need for IMD expenditure
authority.
Background
IMD exclusion . 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
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very few instances in which federal Medicaid law prohibits FFP
for care provided to enrolled beneficiaries.
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.
Comments
According to the author, under the state's recently approved
Medi-Cal expansion, an estimated 250,000 newly eligible Medi-Cal
beneficiaries will be in need of, or will seek substance use
disorder treatment. However, the author states that
California's capacity for both inpatient medical detoxification
and short-term residential substance use disorder treatment
services is severely limited, primarily due to the federal bar
on FFP for services provided by IMDs. The author states that
DHCS is currently in the process of developing a waiver relating
to the DMC program, and that this bill would require DHCS to
address provider capacity as a part of that waiver. The author
concludes by stating that this bill would allow the Legislature
to have input into the DMC waiver sought by DHCS, and also would
provide DHCS with flexibility to address broader capacity issues
with facilities providing short-term residential treatment and
voluntary inpatient detoxification services.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Assembly Appropriations Committee:
Administrative costs in the range of $200,000 (General
Fund/federal funds) to DHCS to develop a waiver proposal.
DHCS is currently working on a broader demonstration waiver
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related to coordinating substance use services in DMC.
A successful waiver proposal may increase utilization of
services by expanding supply, but costs are not attributable
specifically to this bill, as the services identified in this
bill are already Medi-Cal benefits pursuant to existing law.
SUPPORT : (Verified 8/27/14)
California Association of Alcohol and Drug Program Executive,
Inc. (co-source)
Californians for Safety and Justice (co-source)
County Behavioral Health Directors Association of California
(co-source)
Behavioral Health Services
California American College of Emergency Physicians
California Hospital Association
California Mental Health Directors Association
California Psychiatric Association
California State Association of Counties
Drug Policy Alliance
Legal Services for Prisoners with Children
ASSEMBLY FLOOR : 76-1, 08/27/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, John A. P�rez, V. Manuel P�rez,
Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, Atkins
NOES: Donnelly
NO VOTE RECORDED: Harkey, Mansoor, Vacancy
JL:e 8/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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