BILL ANALYSIS
SENATE HEALTH AND HUMAN SERVICES
COMMITTEE ANALYSIS
Senator Martha M. Escutia, Chair
BILL NO: AB 34
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AUTHOR: Steinberg
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AMENDED: June 23, 1999
HEARING DATE: June 30, 1999
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FISCAL: Appropriations/Urgency
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CONSULTANT:
McCarthy
SUBJECT
Mental health funding: local grants
SUMMARY
Revises existing county demonstration programs serving
severely mentally ill adults and establishes grant program
for counties with significant numbers of homeless mentally
ill adults.
ABSTRACT
Current law:
1.Requires counties, as providers of last resort, to
support and provide needed health services to indigent
and incapacitated persons not eligible to be served by
other institutions or programs;
2.Requires the state Department of Mental Health (DMH) to
establish three county mental health care demonstration
projects under the Adult and Older Adult Mental Health
System-of-Care Act (hereinafter referred to as the "Adult
System-of- Care Act"). The Adult System-of-Care programs
provide community-based treatment, case management and
coordination of interagency services.
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This bill:
1.Continues the three existing demonstration programs in
Los Angeles, Stanislaus, and Ventura counties;
2.Expands the Adult System-of-Care Act by establishing a
grant program in counties with significant numbers of
homeless mentally ill persons;
3.Authorizes existing and expanded programs to provide
various services to homeless mentally ill adults, in
order to place such persons in treatment and recovery
programs and into stable housing;
4.Revises the Adult-System-of-Care Act statute to add
outreach and early intervention as authorized program
components;
5.Requires DMH to administer the grant program and revises
requirements for program performance standards
established by DMH;
6.Permits grant funding increases or decreases in future
years, based on performance requirements (especially that
counties demonstrate reduced criminal justice costs due
to services provided to homeless mentally ill persons);
7.Appropriates $12 for grants for FY 1999-2000, including
state administration and county planning, outreach and
services; and appropriates $41 million for FY 2000-2001.
FISCAL IMPACT
AB 34 contains an appropriation of $12 million to the State
Department of Mental Health for: training related to county
systems-of-care programs for severely mentally ill adults
($500,000); training for outreach programs to homeless
mentally ill adults ($500,000); strategic planning grants
for county systems-of-care programs for existing
demonstration counties and new counties with significant
populations of homeless mentally ill persons ($2 million);
service and expansion grants to county programs serving
homeless mentally ill adults and other severely mentally
ill adults in a system-of-care model before 4/1/2000 ($9
million).
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This bill also allows up to $500,000 to be used by DMH for
administrative costs associated with the programs and
allows the $12 million to be prorated among counties if
projected first-year costs exceed appropriation. In
addition, AB 34 contains an appropriation of $41 million
for fiscal year 2000-2001, and contains legislative intent
language pertaining to allocation of future appropriations.
BACKGROUND AND DISCUSSION
1.Current law
Under Welfare and Institutions Code (WIC) Section 17000,
counties are the providers of last resort of income
support and health care to indigent and incapacitated
persons who are not supported and relieved by relatives,
friends, or public or private institutions or programs.
State policy changes, commencing in the 1970s,
transferred a number of mentally ill patients from state
mental hospitals to community-based treatment programs.
The policy of placing of placing patients in the
community-based programs was intended to improve the
quality of life and care of residents and also was
expected to reduce state costs. In addition, as
reiterated in a recent U.S. Supreme Court Case (Olmstead
vs. L.C. and E.W.), the policy supported the right of
mentally ill persons to reside in the least restrictive
environment possible.
The transfer has resulted in state cost savings.
According to the Mental Health Association of California,
"In the early 1970's, before significant
de-institutionalization, institutional care and state
mental hospitals represented 4% of the state general fund
budget. Budget cuts over the next 15 years from 1975 to
1990 reduced the percentage to about 1.5%." However, the
transfer resulted in additional fiscal pressure on local
government to provide services to mentally ill residents.
Under current law, counties operate county mental health
programs; however, funding limitations result in few
counties providing comprehensive, integrated services to
severely mentally ill adults or significant outreach to
homeless mentally ill adults. According to the County
Mental Health Directors Association, despite the
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development of community based system-of-care programs,
"capacity remains inadequate. Community based services
are available to less than half those who need them. The
consequences of untreated serious mental illness are
homelessness, police interaction, exacerbated symptoms
and other personal and community problems."
The Adult Systems-of-Care Act, AB 3777 (Wright), Chapter
982, Statutes of 1988, authorized demonstration programs
in three counties for delivering mental health services
to seriously mentally ill adults. Two types of
demonstration programs were authorized: a "system of
care" model, which has been piloted in Ventura County,
and an "integrated service agencies (ISA)" model, piloted
in Stanislaus and Los Angeles Counties. SB 659 (Wright),
Chapter 153, Statutes of 1996, reauthorized the
demonstration projects, and required DMH to issue
requests for proposals for additional projects in any
year in which funding was available (WIC Section 5814).
The Adult Systems-of-Care Act programs support
coordinated services from county and state agencies,
including criminal justice, mental health, employment,
housing, welfare, and health. The Act also requires DMH
to establish standards for systems-of-care programs
including requiring: county services plan, consultation
with specified local entities and families, assigning
each client a case manager or multidisciplinary team, and
an individual service plan for clients.
2.AB 34 - Major Program changes
AB 34 makes major revisions to the Adult System-of-Care
Act and expands the program to other counties through a
new grant program. The significant revisions to program
requirements under the Act are as follows:
a. Adds legislative intent that outreach services to
homeless mentally ill persons are a program component
for both new and existing programs;
b. Revises performance standards DMH must establish
for county programs to include coordination and access
to medication, substance abuse services, supportive
housing, veterans' services, and vocational
rehabilitation;
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c. Also modifies performance standards to include
county sheriffs, local police chiefs and probation
officers among the local officials who must be
consulted in the operation of the system-of-care
program;
d. Requires counties receiving strategic planning
funds to establish local strategy committees composed
of representatives of local government and providers
of housing assistance, mental health services,
veterans' services, law enforcement, substance abuse
services and employment services;
e. Requires the local strategy committee to develop a
comprehensive plan for mental health services to the
target population, including specified performance
measures;
f. Expands requirements for individual case plans to
include goals of access to health care, reduction of
antisocial or criminal behavior, reduction of symptoms
of mental illness, living in the least restrictive
environment, engaging in work or other productive
activities, and access to vocational training;
g. Requires the DMH Director to establish an advisory
committee on development of grant award criteria and
performance measures for evaluating county programs,
including representatives from veterans' services
programs, law enforcement, mental health providers,
the Board of Corrections, substance abuse service
providers, the Department of Rehabilitation, and
providers of employment services;
h. Requires, beginning November 1, 2001, and annually
thereafter, that DMH report to the Legislature
regarding the impact of grants in reducing
incarceration of mentally ill persons and
recommendations on mental health policies.
3.Grant program expansion
AB 34 maintains the funding of the three existing
demonstration projects under the revised program as a
first priority and requires, as funds become available,
additional grants be provided to fund training and
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services for counties with significant populations of
homeless mentally ill persons. AB 34 allows grants to
counties to be used for the three purposes described
below, among others.
a. Strategic planning grants -- For new counties or
existing demonstration programs, grants may be
provided for counties to create a comprehensive county
systems-of-care for mentally ill adults.
.b Outreach grants -- AB 34 also authorizes four-year
service "outreach" grants for services to homeless
mentally ill persons. The amount of grant funds would
be based on the number of anticipated contacts with
homeless mentally ill persons and those at risk of
homelessness, as well as the number likely to be
treated successfully. This bill also permits an
outreach grant to be renewed if the county
demonstrates it is successfully bringing into
treatment the projected number of persons. However,
if the DMH Director determines a county program has
not reduced criminal justice expenditures, the
director may limit or expand grant funds, require the
county to expand services under the grant, or impose
other conditions.
.c Service expansion grants -- AB 34 authorizes 4-year
service expansion grants and requires such grants be
sufficient to provide mental health services,
medications, alcohol and drug services, housing
assistance, vocational rehabilitation, and other
services, with consideration of other funding sources.
This bill authorizes renewal of expansion grants if
the county demonstrates to DMH that services provided
are reducing unmet mental health need and law
enforcement expenditures. As with outreach grants, AB
34 permits subsequent funding to be modified if a
county does not reduce criminal justice expenditures
or meet other performance benchmarks. In addition,
state-county contracts for the four-year service
expansion grants would contain a formula for annual
increases based on increases in the target population.
In order to reward community investment in the program,
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AB 34 allows DMH to use, as a criteria for grant
increases, the degree to which a county provides more
extensive mental health services to residents with
funds other than Adult Systems-of-Care Act funds.
Conversely, this bill also allows DMH to penalize
counties providing such services to fewer clients than
are being served in other counties of a comparable
size.
4.Contract exemptions
AB 34 exempts the contracts entered into under the
revised system-of-care grant program from the Public
Contract Code, the State Administrative Manual and
approval by the Department of General Services.
5.County maintenance of effort and Realignment issues
AB 34 provides that counties are not required to provide
a local match to receive funds under the new grant
program. However, counties receiving systems-of-care Act
grant funds would have to demonstrate a maintenance of
effort (MOE) in regard to existing funding for adult and
children's mental health services.
Comment: A technical amendment may be needed to specify
that the maintenance of effort would apply to both
dollars and in-kind services, as separate categories, to
maintain existing support of both kinds.
In addition, AB 34 requires that if a county accepts
adult or children's System-of-Care funds, the county
cannot reduce its existing System-of-Care funds or the
"Bronzan-McCorquodale service" funds.
Bronzan-McCorquodale service funds are part of the 1991
"State/Local Program Realignment", through which
additional program responsibility for several health and
human services programs, along with funding sources, were
transferred from the state to the county level of
government.
Comment: With specified restrictions on the percentage
amounts, current law allows counties to transfer
Realignment funds between program accounts to reflect
local needs and priorities. Specifically, counties can
transfer a percentage of mental health program dollars to
other Realignment health and social services accounts;
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counties have utilized this authority from time to time.
Should the bill be amended to continue to allow the
transfer of these Realignment funds, as specified in
current law, if a county receives the new system-of-care
funds?
6.Arguments in support of AB 34
This bill is sponsored by the Mental Health Association
in California. The author's purpose in proposing this
bill is to reduce homelessness of people with severe
mental illnesses. The author notes such persons
frequently are unable to recognize the need for medical
assistance, a cycle of hospitalization, return to the
streets, arrest, and return to homelessness ensues.
The California Mental Health Planning Council argues this
bill will reverse a pattern of underfunding that has
continued since deinstitutionalization of the mentally
ill in the early 1970's. The California Council of
Community Mental Health Agencies (CCCMHA) argues the only
way to stop the cycle of homelessness, due to untreated
illness, is to provide incentive funding for county
programs. The California Healthcare Association,
representing hospitals, argues: "Hospital providers are
acutely aware of the lack of appropriate treatment and
housing resources for the seriously mentally ill in the
community. It is often difficult, if not impossible, to
find appropriate aftercare services or residential
placement for a patient once he/she has been stabilized
in the hospital. With nowhere to go, patients often
relapse and either end up back in the hospital, or, too
often, in the criminal justice system. The measure will
ultimately save the state hundreds of millions of dollars
in corrections costs as counties are able to provide the
comprehensive community based services that are proven to
be effective?".
In addition, the Little Hoover Commission, in support of
AB 34, states that in its 1998 report, Beyond Bars:
Correctional Reforms to Lower Prison Costs and Reduce
Crime, it found "?community based programs were a viable
alternative to prison for nonviolent offenders?" The
Commission states, "County services for the mentally ill,
such as AB 34, would constitute such a program." The
Commission argues counties bear all the cost of handling
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offenders at the local level, but none of the cost when
judges send offenders to state prison and this "provides
a fiscal disincentive for counties to independently
develop alternatives, including expanded services to the
mentally ill."
The California State Sheriff's Association states, in
support of AB 34, "?from a law enforcement perspective,
the need for adult mental health and related services is
clear. The unfortunate reality is that our local jails
have become the last resort for many of our mentally ill.
This is a disservice to them and to us". The Los
Angeles County Sheriff's Department asserts that AB 34
will provide resources to keep mentally ill patients from
weighing down the criminal justice system.
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7.Concerns
The Citizens Commission on Human Rights, Church of
Scientology, has expressed concern regarding the Ventura
County demonstration project and alleged Federal Health
Care Financing Agency investigation into whether billing
for mental health services under Medi-Cal and patient
placement have been correct and appropriate. The
expressed concern focuses on whether "blending" of funds
resulted in uses other than that for which they were
appropriated, whether patients were placed in the least
restrictive environment, and whether DMH exercised
sufficient oversight.
Comment: The Committee may want to consider whether the
bill should be amended to require that, when services are
coordinated, the county program to which the funds were
appropriated or allocated by the state or federal
government must insure that: funds are used for the
purposes for which they were appropriated or allocated;
state and federal requirements regarding fund usage and
tracking of funds are met; patient records are maintained
in such a manner as to protect privacy and
confidentiality, as required under federal and state law.
PRIOR ACTIONS
Assembly Floor: 79-1Pass
Assembly Appropriations: 17-4Do Pass as Amended
Assembly Health: 14-0Do Pass as Amended
POSITIONS
Support: Mental Health Association in California
(sponsor)
Alta California Regional Center
Association of Regional Center Agencies
California Alliance for the Mentally Ill
California Association of Veteran Services
Agencies
California Healthcare Association
California Mental Health Directors
Association
California Mental Health Planning Council
California Nurses Association
California Psychiatric Association
California State Association of Counties
STAFF ANALYSIS OF ASSEMBLY BILL 34 (STEINBERG) Page
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California State Sheriff's Association
County of San Joaquin Veterans Service
Office
County of Santa Clara Board of Supervisors
Governmental Advocates, Inc.
Jericho
Kern Regional Center
Little Hoover Commission
National Alliance for the Mentally
Ill-Whittier
Office of the Sheriff of the following
counties:
Calaveras Contra Costa
Glenn Los Angeles
Mendocino Monterey
Nevada San Benito
San Mateo Shasta
Stanislaus Yuba
Ponoma Valley Alliance for the Mentally Ill
Protection and Advocacy, Inc.
Regional Center of Orange County
Stanislaus Department of Aging and Veterans
Services
Union of American Physicians and Dentists
Westside Regional Center
1 individual letter
OPPOSE: None received
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