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AB-2055 Specialty mental health services and substance use disorder treatment.(2019-2020)

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Date Published: 03/16/2020 09:00 PM
AB2055:v97#DOCUMENT

Amended  IN  Assembly  March 16, 2020
Amended  IN  Assembly  March 05, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2055

Introduced by Assembly Member Wood

February 03, 2020

An act to amend Sections 14708, 14718, and 14723 of, and to add Sections 14124.245 and 14724 to, and to add Article 3.3 (commencing with Section 14124.3) to Chapter 7 of Part 3 of Division 9 of, the Welfare and Institutions Code, relating to Medi-Cal.


LEGISLATIVE COUNSEL'S DIGEST


AB 2055, as amended, Wood. Specialty mental health services and substance use disorder treatment: Behavioral Health Quality Improvement program and account. treatment.
(1) Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services, including behavioral health services, which encompass specialty mental health services and substance use disorder treatment. treatment that are provided under the Medi-Cal Specialty Mental Health Services Program, the Drug Medi-Cal Treatment Program, and the Drug Medi-Cal organized delivery system, respectively. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. provisions, and specialty mental health services and substance use disorder treatment are funded through certified public expenditures. Existing law requires the department to implement managed mental health care for purposes of delivering specialty mental health services to Medi-Cal beneficiaries through contracts with county mental health plans. Under existing law, substance use disorder treatment is delivered through the Drug Medi-Cal Treatment Program and the Drug Medi-Cal organized delivery system. plans.
Existing law, the Medi-Cal 2020 Demonstration Project Act, requires the department to implement specified components of a Medi-Cal demonstration project, including the Global Payment Program, the Whole Person Care pilot program, and the Dental Transformation Initiative, consistent with the Special Terms and Conditions approved by the federal Centers for Medicare and Medicaid Services. Pursuant to existing law, the department has created a multiyear initiative, the Medi-Cal Healthier California for All initiative, for purposes of building upon the outcomes of various Medi-Cal pilots and demonstration projects, including the Medi-Cal 2020 demonstration project.
This bill would require the department to establish, implement, and administer the Behavioral Health Quality Improvement Program to assist county mental health plans and counties that administer the Drug Medi-Cal Treatment Program or the Drug Medi-Cal organized delivery system for purposes of preparing those entities for implementation of the behavioral health components included in the Medi-Cal Healthier California for All initiative, and would establish in the State Treasury the Behavioral Health Quality Improvement Account to fund those efforts. The bill would require the department to determine the methodology and distribution of funds appropriated to those entities. The bill would authorize the department to implement these provisions by various means, including provider bulletin, without taking regulatory action, and to enter into contracts that would be exempt from specified provisions of state contracting requirements. The bill would condition the implementation of these provisions to the extent that the department determines that federal financial participation is not jeopardized.

(2)Existing law makes a mental health plan eligible for federal reimbursement for providing specialty mental health services to Medi-Cal beneficiaries. Existing law requires counties to seek the maximum federal reimbursement possible for services rendered to persons with mental illnesses and makes a county, city, or city and county eligible to receive supplemental reimbursement for providing those services pursuant to a specified federal waiver. Existing law requires the amount of federal reimbursement to counties that have certified that they have incurred certified public expenditures to be consistent with federal Medicaid program requirements for calculating federal upper payment limits.

This bill would make technical, nonsubstantive changes to those provisions.

(2) Existing law provides that any county, political subdivision of the state, or other governmental entity in the state may elect to transfer funds in the form of cash or loans to the department in support of the Medi-Cal program, and provides the department discretion to accept or not accept any elective transfer from a county, political subdivision, or other governmental entity for obtaining federal financial participation. Pursuant to this provision, existing law authorizes the Director of Health Care Services to maximize federal financial participation to provide access to services provided by hospitals that are not reimbursed by certified public expenditure by authorizing the use of intergovernmental transfers to fund the nonfederal share of supplemental payments as permitted under federal law, and requires the department to establish various intergovernmental transfer programs, including the Nondesignated Public Hospital Intergovernmental Transfer Program.
For purposes of the Medi-Cal Specialty Mental Health Services Program, the Drug Medi-Cal Treatment Program, and the Drug Medi-Cal organized delivery system, this bill would require the department to design and implement an intergovernmental transfer program to fund the nonfederal share of supplemental payments and to replace claiming based on certified public expenditures. The bill would require each transferring entity, upon providing any intergovernmental transfer of funds, to certify that the transferred funds qualify for federal financial participation, and would provide that participation in the intergovernmental transfer program is voluntary. The bill would prohibit the director from implementing an intergovernmental transfer program if they determine that the payments do not comply with federal Medicaid program requirements, and would authorize the director to adjust payments to comply with those federal requirements. The bill would require the department to obtain federal approvals and federal matching funds, to implement these provisions by various means, including policy letters, and, by January 1, 2022, and annually thereafter, to provide a status update on the implementation of these provisions.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 14124.245 is added to the Welfare and Institutions Code, immediately following Section 14124.24, to read:

14124.245.
 (a) Notwithstanding subdivision (c) of Section 14124.24, the department, in consultation with the California Behavioral Health Directors Association and representatives of counties, shall design and implement an intergovernmental transfer program relating to services provided by counties under the Drug Medi-Cal Treatment Program and the Drug Medi-Cal organized delivery system to fund the nonfederal share of supplemental payments, as permitted under Section 433.51 of Title 42 of the Code of Federal Regulations or any other applicable federal Medicaid program laws, and to replace claiming based on certified public expenditures. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to applicable federal Medicaid program laws, and in the form and manner specified by the department. The total intergovernmental transfer-funded payment amount, which includes the federal and nonfederal share, paid to a county shall be retained by the county and used for providing substance use disorder treatment under the Drug Medi-Cal Treatment Program and the Drug Medi-Cal organized delivery system.
(b) This section shall be implemented on July 1, 2021, or the date on which all necessary federal approvals have been received, whichever is later, and only to the extent intergovernmental transfers from counties are provided for this purpose.
(c) Participation in the intergovernmental transfer program under this section is voluntary on the part of the transferring entities for the purposes of all applicable federal laws.
(d) This section shall be implemented only to the extent federal financial participation is available for any reimbursement and federal financial participation is not jeopardized.
(e) If the director determines that the payments do not comply with federal Medicaid program requirements, the director shall not implement an intergovernmental transfer program and may adjust payments as necessary to comply with federal Medicaid program requirements.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall implement this section by letters, information notices, or similar instructions, without taking further regulatory action.
(g) Notwithstanding Section 10231.5 of the Government Code, by January 1, 2022, and annually thereafter, the department shall provide a status update on the implementation of this section to the Joint Legislative Budget Committee and the fiscal and appropriate policy committees of the Legislature.

SECTION 1.SEC. 2.

 Article 3.3 (commencing with Section 14124.3) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read:
Article  3.3. Behavioral Health Quality Improvement Program

14124.3.
 (a) The department shall establish, implement, and administer the Behavioral Health Quality Improvement Program to assist county mental health plans and counties that administer the Drug Medi-Cal Treatment Program or the Drug Medi-Cal organized delivery system for purposes of preparing those entities and their contracting health care providers for implementation of the behavioral health components included in the Medi-Cal Healthier California for All initiative.
(b) (1) There is hereby created in the State Treasury the Behavioral Health Quality Improvement Program Account for purposes of the Behavioral Health Quality Improvement Program. Moneys in this account shall be exclusively used to achieve the purpose of the program.
(2) The department shall determine the methodology and distribution of the moneys included in the Behavioral Health Quality Improvement Program Account to county mental health plans and counties that administer the Drug Medi-Cal Treatment Program or the Drug Medi-Cal organized delivery system that the department deems qualified.
(c) This section shall be implemented only if and to the extent that the department determines that federal financial participation is not jeopardized.
(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of information notices or other similar instructions, without taking regulatory action.
(e) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Any contract entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and from the review or approval of any division of the Department of General Services.

SEC. 2.Section 14708 of the Welfare and Institutions Code is amended to read:
14708.

(a)For purposes of federal reimbursement to counties that have certified to the state that they have incurred certified public expenditures, the reimbursement amounts shall be consistent with federal Medicaid program requirements for calculating federal upper payment limits, as specified in the approved Medicaid state plan and waivers.

(b)If the reimbursement methodology utilizes federal upper payment limits and the total cost of services exceeds the state maximum rates in effect for the 2011–12 fiscal year, a county may use certified public expenditures to claim the costs of services that exceed the state maximum rates, up to the federal upper payment limits. If a county chooses to claim costs that exceed the state maximum rates with certified public expenditures, the county shall use only local funds, and not state funds, to claim the portion of the costs over the state maximum rates. As a condition of receiving reimbursement up to the federal upper payment limits, a county shall enter into and maintain an agreement with the department implementing this subdivision.

(c)Notwithstanding this section, if a health facility has entered into a negotiated rate agreement pursuant to Article 2.6 (commencing with Section 14081) of Chapter 7, the facility’s rates shall be governed by that agreement.

SEC. 3.Section 14718 of the Welfare and Institutions Code is amended to read:
14718.

(a)This section shall be limited to specialty mental health services reimbursed to a mental health plan (MHP) that certifies public expenditures subject to cost settlement or specialty mental health services reimbursed through the department’s fiscal intermediary.

(b)The following provisions apply to matters related to specialty mental health services provided under the approved Medi-Cal state plan and the Medi-Cal Specialty Mental Health Services Waiver, including, but not limited to, reimbursement and claiming procedures, reviews and oversight, and appeal processes for mental health plans (MHPs) and MHP subcontractors.

(1)As determined by the department, the MHP shall submit claims for reimbursement to the Medi-Cal program for eligible services.

(2)The department may offset the amount of any federal disallowance, audit exception, or overpayment against subsequent claims from the MHP. The department may offset the amount of any state disallowance, audit exception, or overpayment against subsequent claims from the mental health plan, through the 2010–11 fiscal year. This offset may be done at any time, after the department has invoiced or otherwise notified the MHP about the audit exception, disallowance, or overpayment. The department shall determine the amount that may be withheld from each payment to the mental health plan. The maximum withheld amount shall be 25 percent of each payment as long as the department is able to comply with the federal requirements for repayment of federal financial participation pursuant to Section 1903(d)(2) of the federal Social Security Act (42 U.S.C. Sec. 1396b(d)(2)). The department may increase the maximum amount when necessary for compliance with federal laws and regulations.

(3)(A)Oversight by the department of the MHPs may include client record reviews of Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) specialty mental health services rendered by MHPs and MHP subcontractors under the Medi-Cal Specialty Mental Health Services Waiver, in addition to other audits or reviews that are conducted.

(B)The department may contract with an independent, nongovernmental entity to conduct client record reviews. The contract awarded in connection with this section shall be on a competitive bid basis, pursuant to the Department of General Services contracting requirements, and shall meet all of the following additional requirements:

(i)Require the entity awarded the contract to comply with all federal and state privacy laws, including, but not limited to, the federal Health Insurance Portability and Accountability Act (HIPAA; 42 U.S.C. Sec. 1320d et seq.) and its implementing regulations, the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code), and Section 1798.81.5 of the Civil Code. The entity shall be subject to existing penalties for violating those laws.

(ii)Prohibit the entity awarded the contract from using or disclosing client records or client information for a purpose other than the one for which the record was given.

(iii)Prohibit the entity awarded the contract from selling client records or client information.

(C)For purposes of this paragraph, the following terms have the following meanings:

(i)“Client record” means a medical record, chart, or similar file, including other documents containing information on an individual recipient of services, including, but not limited to, clinical information, dates and times of services, and other information relevant to the individual and services provided and that evidences compliance with legal requirements for Medi-Cal reimbursement.

(ii)“Client record review” means examination of the client record for a selected individual recipient for the purpose of confirming the existence of documents that verify compliance with legal requirements for claims submitted for Medi-Cal reimbursement.

(D)The department shall recover overpayments of federal financial participation from MHPs within the timeframes required by federal law and regulation for repayment to the federal Centers for Medicare and Medicaid Services.

(4)(A) The department, in consultation with mental health stakeholders, the County Behavioral Health Directors Association of California, and MHP subcontractor representatives, shall provide an appeals process that specifies a progressive process for resolution of disputes about claims or recoupments relating to specialty mental health services under the Medi-Cal Specialty Mental Health Services Waiver.

(B)The department shall provide MHPs and MHP subcontractors the opportunity to directly appeal findings in accordance with procedures that are similar to those described in Article 1.5 (commencing with Section 51016) of Chapter 3 of Subdivision 1 of Division 3 of Title 22 of the California Code of Regulations, until new regulations for a progressive appeals process are promulgated. When an MHP subcontractor initiates an appeal, it shall give notice to the MHP. The department shall propose a rulemaking package consistent with the department’s appeals process that is in effect on July 1, 2012, by no later than the end of the 2013–14 fiscal year. The reference in this subparagraph to the procedures described in Article 1.5 (commencing with Section 51016) of Chapter 3 of Subdivision 1 of Division 3 of Title 22 of the California Code of Regulations, only applies to those appeals addressed in this subparagraph.

(C)The department shall develop regulations as necessary to implement this paragraph.

(5)The department shall conduct oversight of utilization controls as specified in Section 14133. The MHP shall include a requirement in any subcontracts that all inpatient subcontractors maintain necessary licensing and certification. MHPs shall require that services delivered by licensed staff are within their scope of practice. This chapter does not prohibit the MHPs from establishing standards that are in addition to the federal and state requirements provided that these standards do not violate federal and state requirements and guidelines.

(6)(A) Subject to federal approval and consistent with state requirements, the MHP may negotiate rates with providers of specialty mental health services.

(B)Any excess in the distribution of funds over the expenditures for services by the MHP shall be spent for the provision of specialty mental health services and related administrative costs.

(7)This chapter does not limit the MHP from being reimbursed appropriate federal financial participation for any qualified services. To receive federal financial participation, the MHP shall certify its public expenditures for specialty mental health services to the department.

(8)Notwithstanding Section 14115, claims for federal reimbursement for service pursuant to this chapter shall be submitted by MHPs within the timeframes required by federal Medicaid program requirements and the approved Medicaid state plan and waivers.

(9)The MHP shall use the fiscal intermediary of the Medi-Cal program of the department for the processing of claims for inpatient psychiatric hospital services rendered in fee-for-service Medi-Cal hospitals. The department shall request the Controller to offset the distribution of funds to the counties from the Mental Health Subaccount, the Mental Health Equity Subaccount, or the Vehicle License Collection Account of the Local Revenue Fund, or funds from the Mental Health Account or the Behavioral Health Subaccount of the Local Revenue Fund 2011 for the nonfederal financial participation share for these claims.

(c)Counties may set aside funds for self-insurance, audit settlement, and statewide program risk pools. The counties shall assume all responsibility and liability for appropriate administration of the funds. Special consideration may be given to small counties with a population of less than 200,000. This subdivision does not make the state or department liable for mismanagement or loss of funds by the entity designated by counties under this subdivision.

(d)The department shall consult with the County Behavioral Health Directors Association of California in February and September of each year to obtain data and methodology necessary to forecast future fiscal trends in the provision of specialty mental health services provided under the Medi-Cal Specialty Mental Health Services Waiver, to estimate yearly specialty mental health services related costs, and to estimate the annual amount of federal funding participation to reimburse costs of specialty mental health services provided under the Medi-Cal Specialty Mental Health Services Waiver. This shall include a separate presentation of the data and methodology necessary to forecast future fiscal trends in the provision of Early Periodic Screening, Diagnostic, and Treatment specialty mental health services provided under the Medi-Cal Specialty Mental Health Services Waiver, to estimate annual EPSDT specialty mental health services related costs, and to estimate the annual amount of EPSDT specialty mental health services provided under the Med-Cal Specialty Mental Health Services Waiver, including federal funding participation to reimburse costs of EPSDT.

(e)When seeking federal approval for any federal Medicaid state plan amendment or waiver associated with Medi-Cal specialty mental health services, the department shall consult with staff of the Legislature, counties, providers, and other stakeholders in the development of the state plan amendment or waiver.

SEC. 4.Section 14723 of the Welfare and Institutions Code is amended to read:
14723.

(a)Each eligible public agency, as described in subdivision (b), may, in addition to reimbursement or other payments that the agency would otherwise receive for Medi-Cal specialty mental health services, receive supplemental Medi-Cal reimbursement to the extent provided for in this section.

(b)A public agency shall be eligible for supplemental reimbursement only if it is a county, city, or city and county, and, if consistent with Section 14718, that entity provides as a mental health plan, or subcontracts for, specialty mental health services to Medi-Cal beneficiaries pursuant to the Medi-Cal Specialty Mental Health Services Consolidation Waiver (CA-17), as approved by the federal Centers for Medicare and Medicaid Services.

(c)(1)Subject to paragraph (2), an eligible public agency’s supplemental reimbursement pursuant to this section shall be equal to the amount of federal financial participation received as a result of the claims submitted pursuant to paragraph (2) of subdivision (f).

(2)Notwithstanding paragraph (1), in computing an eligible public agency’s reimbursement, the expenditures certified pursuant to paragraph (1) of subdivision (e), when combined with the amount received from other sources of payment and with reimbursement from the Medi-Cal program, including expenditures otherwise certified for purposes of claiming federal financial participation, shall not exceed 100 percent of actual and allowable costs, as determined pursuant to California’s Medicaid State Plan, for the specialty mental health services to which the expenditure relates. Supplemental payment may be made on an interim basis until the actual, allowable costs are finally determined.

(3)The supplemental Medi-Cal reimbursement provided by this section shall be distributed under a payment methodology based on specialty mental health services provided to Medi-Cal patients by each eligible public agency, on a per-visit basis, a per-procedure basis, a time basis, in one or more lump sums, or on any other federally permissible basis. The department shall seek approval from the federal Centers for Medicare and Medicaid Services for the payment methodology to be utilized, and shall not make any payment pursuant to this section before obtaining that federal approval.

(d)(1)It is the intent of the Legislature in enacting this section to provide the supplemental reimbursement described in this section without any expenditure from the General Fund. The department may require an eligible public agency, as a condition of receiving supplemental reimbursement pursuant to this section, to enter into, and maintain, an agreement with the department for the purposes of implementing this section and reimbursing the department for the costs of administering this section.

(2)Expenditures submitted to the department for purposes of claiming federal financial participation under this section shall be paid only with funds from the public agencies described in subdivision (b) and certified to the state as provided in subdivision (e).

(e)An eligible public agency shall do all of the following:

(1)Certify, in conformity with the requirements of Section 433.51 of Title 42 of the Code of Federal Regulations, that the claimed expenditures for the specialty mental health services are eligible for federal financial participation.

(2)Provide evidence supporting the certification as specified by the department.

(3)Submit data, as specified by the department, to determine the appropriate amounts to claim as expenditures qualifying for federal financial participation.

(4)Keep, maintain, and have readily retrievable, any records specified by the department to fully disclose reimbursement amounts to which the eligible public agency is entitled, and any other records required by the federal Centers for Medicare and Medicaid Services.

(f)(1)The department shall promptly seek any necessary federal approvals for the implementation of this section. If necessary to obtain federal approval, the program shall be limited to those costs that the federal Centers for Medicare and Medicaid Services determines to be allowable expenditures under Title XIX of the federal Social Security Act (Subchapter 19 (commencing with Section 1396) of Chapter 7 of Title 42 of the United States Code). If federal approval is not obtained for implementation of this section, this section shall not be implemented.

(2)The department shall submit claims for federal financial participation for the expenditures described in subdivision (e) related to specialty mental health services that are allowable expenditures under federal law.

(3)The department shall submit, on an annual basis, any necessary materials to the federal Centers for Medicare and Medicaid Services to provide assurances that claims for federal financial participation include only those expenditures that are allowable under federal law.

(g)The director may adopt regulations as are necessary to implement this section. The adoption, amendment, repeal, or readoption of a regulation authorized by this subdivision shall be deemed to be necessary for the immediate preservation of the public peace, health and safety, or general welfare, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the department is exempt from the requirement that it describe specific facts showing the need for immediate action.

SEC. 3.

 Section 14724 is added to the Welfare and Institutions Code, to read:

14724.
 (a) Notwithstanding Sections 14708, 14718, and 14723, and subdivisions (e) and (f) of Section 14711, the department, in consultation with the California Behavioral Health Directors Association and representatives of counties, shall design and implement an intergovernmental transfer program relating to Medi-Cal specialty mental health benefits provided by county mental health plans to fund the nonfederal share of supplemental payments, as permitted under Section 433.51 of Title 42 of the Code of Federal Regulations or any other applicable federal Medicaid program laws, and to replace claiming based on certified public expenditures. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to applicable federal Medicaid program laws, and in the form and manner specified by the department. The total intergovernmental transfer-funded payment amount, which includes the federal and nonfederal share, paid to a county shall be retained by the county and used for providing Medi-Cal specialty mental health services under the Medi-Cal Specialty Mental Health Services Program.
(b) This section shall be implemented on July 1, 2021, or the date on which all necessary federal approvals have been received, whichever is later, and only to the extent intergovernmental transfers from counties are provided for this purpose.
(c) Participation in the intergovernmental transfer program under this section is voluntary on the part of the transferring entities for the purposes of all applicable federal laws.
(d) This section shall be implemented only to the extent federal financial participation is available for any reimbursement and federal financial participation is not jeopardized.
(e) If the director determines that the payments do not comply with federal Medicaid program requirements, the director shall not implement an intergovernmental transfer program and may adjust payments as necessary to comply with federal Medicaid program requirements.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall implement this section by letters, information notices, or similar instructions, without taking further regulatory action.
(g) Notwithstanding Section 10231.5 of the Government Code, by January 1, 2022, and annually thereafter, the department shall provide a status update on the implementation of this section to the Joint Legislative Budget Committee and the fiscal and appropriate policy committees of the Legislature.