SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1058 (Salas) - Medi-Cal: specialty mental health services and substance use disorder treatment

Bill Summary:

AB 1058 would require the Department of Health Care Services (DHCS), commencing no later than January 15, 2020, to engage in a stakeholder process, as specified, and to develop and submit recommendations to the Legislature, by September 15, 2020, on barriers for Medi-Cal beneficiaries with co-occurring substance use disorders and mental health conditions in the Drug Medi-Cal Treatment Program (DMC), the Drug Medi-Cal organized delivery system (DMC-ODS), and the Medi-Cal Specialty Mental Health Services (SMHS) Program. Would repeal the bill’s provisions on January 1, 2021.

Fiscal Impact:

• According to the DHCS, $527,000 in FY 2020-21, and $500,000 in FY 2021-22, and ongoing, for 1.0 Health Program Specialist I and 1.0 Associate Governmental Program Analyst in the Mental Health Services Division (MHSD) to provide technical assistance to the stakeholder group; analyze and implement strategies and recommendations; and draft the legislative report. In addition, 1.0 Attorney IV to support MHSD with potential changes in law, requests for federal approval of State Plan amendments and waivers, and ongoing oversight. Fund source is 50/50 General Fund/federal fund.
• Staff notes unknown, potential cost-pressures to the extent the stakeholder group’s legislative report includes significant policy recommendations to be implemented. These unknown cost pressures may be limited depending on whether financial participation is secured. While the bill does not necessarily identify DHCS as a member of the stakeholder group -- the bill’s language requires DHCS “engage[ment]” – staff notes the department’s estimate reflects anticipatory participation in, and coordination of, the stakeholder group, including meeting facilitation and the provision of technical assistance. Given the bill’s time-limited provisions, the estimated 3.0 permanent, ongoing positions may reflect the administrative challenges in hiring and training staff, as well as cost-pressures to implement report findings. However, position duration (limited-term or permanent positions) should be considered within the context of DHCS’ Mental Health and Substance Use Disorder Services Re-Organization, which is currently underway, and through the annual budget process.

Background:

1. The DHCS administers the Medi-Cal program, which provides health care services to qualified individuals who are low-income. Medi-Cal mental health benefits are delivered through two separate systems. County mental health plans provide a range of specialty mental health services to individuals with more severe mental illnesses, while Medi-Cal managed care plans provide non-specialty mental health services. The delivery of specialty mental health services through county mental health plans is commonly referred to as a “carve out,” as is the coverage of anti-psychotic prescription medication through fee-for-service Medi-Cal. A “carve out” is when services covered by the Medi-Cal program are delivered outside of a managed care plan.

California’s mental health system underwent two major changes to its fiscal and governance structure in 1991, and again, in 2011, under realignment. Under the 2011 realignment, 36 counties bear full financial responsibility for the non-federal share of Medi-Cal specialty-mental health services, including the Early Prevention, Screening, Diagnosis, and Treatment (EPSDT) Program and mental health managed care, with the exception of newer mandated costs. County mental are responsible for providing specialty mental health services to Medi-Cal beneficiaries who meet specified medical necessity criteria. Under Proposition 30, state requirements enacted after September 30, 2012, that have an overall effect of increasing the costs already borne by a local agency for programs or levels of service mandated by 2011 Realignment applies to local agencies only to the extent that the state provides annual funding for the cost increase.

In addition to the differences in the way mental health plans and Medi-Cal managed care plans claim and are reimbursed for Medi-Cal services, these entities also pay providers differently. Medi-Cal managed care reimburses contracting health care providers through capitation rates, fee-for-service, and some fee-for-service with incentive payments (e.g, additional funds for meeting specified quality goals, having extended hours of operation, or meeting reporting requirements). In contrast, county mental health plans regulations specify claiming procedures for providers in which certain services are billed based on minutes of time (Medication Support Services, Crisis Intervention, Targeted Case Management), half-day or full-day basis (e.g., Day Treatment and Day Rehabilitation) with a face-to-face visit requirement, or calendar days (e.g., Crisis Residential Treatment Services).

This bill seeks to reconcile the administrative requirements of the two delivery systems for client-centered care. For more background on the Medi-Cal Mental Health Delivery System, please see the joint Assembly and Senate Health Committee’s informational white paper from its February 26, 2019, hearing.

Proposed Law:

AB 1058 would include the following provisions, among others:

• Requires DHCS, no later than January 15, 2020, to engage, in a stakeholder process to develop recommendations for addressing legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring substance use disorders and mental health conditions who access services through the Drug Medi-Cal Treatment Program, the Drug Medi-Cal organized delivery system, and the Medi-Cal Specialty Mental Health Program.
• Specifies stakeholder workgroup membership to include behavioral health subject-matter experts, consumers or advocates, providers, and other stakeholders.
• Requires the stakeholder group to identify administrative duplication, inefficiencies, or impediments to implementing integrated behavioral health services in the Medi-Cal program that exist in law, including state statute and regulation, departmental policy and guidance, and California’s Medicaid demonstration project waivers.
• Requires the stakeholder group develop specified recommendations that would remove barriers to the delivery of integrated behavioral health services for specified Medi-Cal beneficiaries and to support greater flexibility of provider reimbursement.
• Requires the stakeholder process to be completed by September 15, 2020.
• Requires, by September 15, 2020, the DHCS to report to Legislature recommendations developed through the stakeholder process.
• Provides the bill’s provision will be repealed after January 1, 2021.

Related Legislation:

SBX1 1 (Hernandez and Steinberg, Chapter 4, Statutes of 2013) required Medi-Cal to cover the mental health and SUD benefits in the essential health benefits adopted by the state.

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SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 1058

SUBJECT: Medi-Cal: specialty mental health services and substance use disorder treatment

SUMMARY:

Requires the Department of Health Care Services to engage in a stakeholder process to develop recommendations for addressing legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring substance use disorders and mental health conditions who access services through the various Medi-Cal programs, and to report to the Legislature, as specified.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. [WIC §14001.1]
2. Establishes a schedule of benefits in the Medi-Cal program, which includes mental health and SUD services included in the essential health benefits package adopted by the state for purposes of implementing the Patient Protection and Affordable Care Act (ACA) requirement for benefits that must be included in health plans offered in the private individual and small group market and to the Medicaid expansion population. [WIC §14132.03]
3. Requires the development of county mental health plans (CMHP) for the provision of managed Medi-Cal specialty mental health services (SMHS) at the local level to eligible Medi-Cal beneficiaries, including both adults and children, including through the Early Periodic and Screening Diagnostic, and Treatment Services (EPSDT) benefit, as specified. [WIC §14680, 14684]
4. Permits DHCS to enter into a Drug Medi-Cal (DMC) Treatment Program contract with each county for the provision of alcohol and drug use services within the county service area. Requires DHCS to contract for DMC treatment services to ensure beneficiary access to these services, including directly with DMC providers or qualifying entities, as specified. [WIC §14124.20, 14124.21]
5. Requires DHCS to ensure all covered mental health and substance use disorder (SUD) benefits are provided through county Medi-Cal managed care plans, including a county that has opted into the DMC Organized Delivery System (DMC-ODS), as specified. [WIC §14197.1]
6. Defines EPSDT as screening, vision, dental, and hearing services, and other necessary health care, diagnostic services, treatment, and other measures to correct or ameliorate defects and physical and mental illnesses and conditions discovered by the screening services, including SMHS, for eligible individuals who are under the age of 21. [42 USC §1396d(r)]

This bill:

1. Requires DHCS, commencing January 15, 2020, to engage in a stakeholder process to develop recommendations for addressing legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring SUDs and mental health conditions who access services through the various Medi-Cal programs, as specified.
2. Requires the stakeholder group to be comprised of behavioral health experts, consumers or advocates, providers, legislative staff, and county behavioral health agencies and representatives, and to do the following:
   1. Identify administrative duplication, inefficiencies, or impediments to implementing integrated behavioral health services in the Medi-Cal program, as specified;
   2. Review DHCS’s policies and procedures that produce administrative duplication, inefficiencies, or impediments;
   3. Develop recommendations for changes to existing law and DHCS’s policies and guidance that would remove barriers to integrated services, including changes to billing and claiming requirements to support greater flexibility of provider reimbursement for Medi-Cal benefits; and,
   4. Identify recommendations that may be implemented as components of extensions, renewals, or amendments to specified waivers approved by the federal government.
3. Requires the stakeholder process to be completed by September 15, 2020, and requires DHCS to report by that date to the relevant policy and fiscal committees of the Legislature the recommendations developed through the stakeholder process.
4. Sunsets this bill on January 1, 2021.
5. Makes legislative findings and declarations regarding the prevalence of co-occurring mental health conditions and SUDs, the various Medi-Cal programs that administer behavioral health services to beneficiaries, and current inefficiencies and administrative barriers created by the various benefit structures.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, administrative costs estimated in the range of $100,000 to $200,000 (General Fund/federal) to convene and support the workgroup and to issue a report. This report will require significant legal and regulatory analysis.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, SUDs and mental health conditions that are untreated can lead to chronic physical health problems, frequent emergency room visits, higher risk for homelessness, unemployment, criminal justice-system involvement, trauma, suicide, or premature death. Dual diagnosis of these conditions is associated with particularly poor outcomes, including high rates of relapse, hospitalization, and serious infections like HIV and hepatitis. Research has demonstrated that integrated treatment programs for people with co-occurring SUDs and mental health conditions effectively promote recovery. But presently, California’s DMC and SMHS treatment programs are bifurcated under state law, meaning that behavioral health (SUD and mental health) clients must often navigate two separate delivery systems to obtain care. To provide meaningfully integrated SUD and mental health care for Medi-Cal clients, California must identify effective treatment models and implement strategies to address separate DMC and SMHS program requirements that currently produce inefficiencies and disincentivize integrated care. Allowing for fully integrated care for co-occurring mental health conditions and SUDs will help county behavioral health programs more effectively meet the behavioral health needs of all Californians.
2. Background. Medi-Cal mental health benefits are delivered through two separate systems and under a separate statutory framework from the DMC benefit. CMHPs provide a broad range of SMHS to individuals with more severe mental illnesses, while Medi-Cal managed care (MCMC) plans provide non-SMHS. The delivery of SMHS through CMHPs is commonly referred to as a “carve out.” A “carve out” is when services covered by the Medi-Cal program are delivered outside of a MCMC plan. Services for physical and behavioral health conditions have historically been financed and delivered under separate systems. In addition to the two different delivery systems, Medi-Cal coverage of anti-psychotic medications are also carved out (with exceptions) from MCMC plans and are instead reimbursed through fee-for-service Medi-Cal. CMHPs are responsible for providing SMHS to Medi-Cal beneficiaries who meet SMHS medical necessity criteria. SMHS are delivered through 56 CMHPs (Placer and Sierra Counties and Yuba and Sutter Counties operate two separate dual-county combined CMHPs). Medi-Cal beneficiaries that meet medical necessity criteria for SMHS are entitled to receive medically necessary SMHS from their CMHP, regardless of whether or not they are enrolled in a MCMC plan.
   
   Similar to SMHS, DMC is also carved out of the MCMC plan. The scope of DMC services varies by county depending upon whether the county opted-in to the state’s DMC-ODS. In August 2015, DHCS received approval from the Centers for Medicare and Medicaid Services to implement the DMC-ODS waiver, and counties had the option to opt into participating. The DMC-ODS is a pilot project authorized originally under California’s Section 1115 Bridge to Reform Demonstration Waiver and continued in the Medi-Cal 2020 Waiver. The purpose of the pilot program is to test a new paradigm for organized delivery of health care services for Medicaid eligible individuals with an SUD. DMC-ODS waiver services include the existing treatment modalities, and additional new and expanded county optional services. Counties that opted into the DMC-ODS waiver are required to provide a continuum of care to all eligible beneficiaries modeled after the American Society of Addiction Medicine criteria.
   
   In addition to the “carve out” from MCMC, county-provided SMHS and SUD services are operated under a separate waiver on the state level with different levels of detail in state law and regulation. The SMHS delivery system dates back to the mid to late 1990s and operates under a separate state statutory and regulatory structure under a 1915(b) Medicaid waiver. While state law implementing the ACA expanded benefits and populations eligible for DMC services, the program specifics of the DMC-ODS are in the federal Special Terms and Conditions of Medi-Cal 2020, in program guidance issued by DHCS, and in contracts between the state and counties that opted into the DMC-ODS. The goal of the stakeholder process established by this bill is to develop recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring SUDs and mental health conditions who access services in the DMC, DMC-ODS, and SMHS programs.
3. Related legislation. AB 826 (Reyes) requires, among other things, DHCS and Department of Social Services to collect specified data for inclusion in DHCS’s SMHS performance dashboard and to create standardized forms for CMHPs providing SMHS to foster youth placed outside of their original county of jurisdiction, as specified. AB 826 was heard in this Committee on June 12, 2019, and passed by a vote of 7-1.
4. Prior legislation. SBX1 1 (Hernandez and Steinberg, Chapter 4, Statutes of 2013) required Medi-Cal to cover the mental health and SUD benefits in the essential health benefits adopted by the state.
5. Support. The County Behavioral Health Directors Association of California (CBHDA) argues that the state’s DMC and SMHS programs remain completely bifurcated and clients must navigate two systems and work with separate clinical teams, which creates administrative barriers to integrated care and can negatively impact access, quality, and the client experience. For example, care providers must obtain separate Medi-Cal provider certifications, adhere to different documentation and treatment standards, and claim reimbursement through separate mechanisms. DHCS monitors and reviews mental health and SUD programs using distinct evaluation tools and performance measures. CBHDA further states that as a result of these parallel program requirements, care providers seeking to provide co-located, integrated services must expend substantial resources on duplicative processes and record-keeping. Client care is too often shaped by the administrative requirements of each delivery system rather than the unique needs of the individual. The formal stakeholder process established through this bill is an important first step toward identifying and removing administrative barriers that have hindered the expansion of integrated behavioral health treatment programs.

SUPPORT AND OPPOSITION:

Support: County Behavioral Health Directors Association of California (sponsor)

CaliforniaHealth+ Advocates

Community Clinic Association of Los Angeles County

National Health Law Program

Oppose: None received

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ASSEMBLY THIRD READING

ATR Bill Id:AB 1058

Author:(Salas)

As Amended Ver:April 22, 2019

Majority vote

SUMMARY:

Requires the Department of Health Care Services (DHCS) to engage in a stakeholder process to develop recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring substance use disorders (SUD) and mental health conditions who access services through the Drug Medi-Cal Treatment program, the Drug Medi-Cal Organized Delivery System (DMC-ODS) and the Medi-Cal Specialty Mental Health Program (Medi-Cal SMH Program). Requires the stakeholder process to be completed by September 15, 2020, and requires DHCS to report, by September 15, 2020, to the relevant legislative policy and fiscal committees the recommendations developed through the stakeholder process. Sunsets the stakeholder process January 1, 2021.

Major Provisions

COMMENTS:

Medi-Cal mental health benefits are delivered through two separate systems and under a separate statutory framework from the Drug Medi-Cal benefit. Mental Health Plans (MHPs) provide a broad range of SMHS to individuals with more severe mental illnesses, while Medi-Cal managed care (MCMC) plans provide non-SMHS. The delivery of SMHS through MHPs is commonly referred to as a "carve out." A "carve out" is when services covered by the Medi-Cal program are delivered outside of a MCMC plan. Services for physical and behavioral health (which includes mental health and SUDs) have historically been financed and delivered under separate systems. MHPs are responsible for providing SMHS to Medi-Cal beneficiaries who meet SMHS medical necessity criteria. SMHS are delivered through 56 county mental health plans. Medi-Cal beneficiaries that meet medical necessity criteria for SMHS are entitled to receive medically necessary SMHS from their county MHP, regardless of whether or not they are enrolled in a MCMC plan.

Similar to SMHS, Drug Medi-Cal is also carved out of MCMC plan. The scope of DMC services varies by county depending upon whether the county opted-in to the state's DMC-ODS. In August 2015, DHCS received approval from the Centers for Medicare and Medicaid Services to implement the DMC-ODS waiver. The purpose of the pilot program is to test a new paradigm for organized delivery of health care services for Medicaid eligible individuals with a SUD. DMC-ODS waiver services include the existing treatment modalities, and additional new and expanded county optional services. Counties that opt-in to participate in the DMC-ODS waiver are required to provide a continuum of care to all eligible beneficiaries modeled after the American Society of Addiction Medicine criteria.

In addition to the "carve out" from MCMC, county provided SMHS and SUD services are operated under a separate waiver on the state level with different levels of detail in state law and regulation. The SMHS delivery system dates back to the mid to late 1990s and operates under separate state law statutory and regulatory structure under a 1915(b) Medicaid waiver. While state law implementing the ACA expanded benefits and populations eligible for DMC services, the program specifics of the DMC-ODS are in the Special Terms and Conditions of Medi-Cal 2020, in program guidance issued by DHCS, and in contracts between the state and counties that opt in to the DMC-ODS.

According to the Author:

Parallel or separate care delivery systems for mental health and SUD treatment have been shown to be ineffective for the treatment of co-occurring conditions. The need for clients to navigate two systems and work with separate clinical teams can interfere with access to appropriate services. California's DMC and SMH treatment programs remain bifurcated under state law. This structure creates administrative barriers to integrated care and can negatively impact access, quality and the client experience. Care providers and administrators must obtain separate clinical site certifications, observe different documentation and treatment standards, and claim reimbursement through separate mechanisms. For clients, care is too often shaped by the administrative requirements of each delivery system rather than the unique needs of the individual. To provide meaningfully integrated substance use and mental health care for Medi-Cal clients, California must identify effective treatment models and implement strategies to address separate DMC and SMH program requirements that currently produce inefficiencies and disincentives integrated care.

Arguments in Support:

This bill is sponsored by the County Behavioral Health Directors Association (CBHDA), writes that the formal stakeholder process established through this bill is an important first step toward identifying and removing administrative barriers that have hindered the expansion of integrated behavioral health treatment programs. This bill would require a comprehensive analysis of current legal and administrative barriers to service integration and would engage a diverse group of stakeholders in developing recommendations for policy changes informed by clinical best practices. This planning process will ensure that DHCS, the Legislature, and behavioral health advocates are prepared to propose and implement new policies and benefit designs that will facilitate the expansion of integrated behavioral health care.

The National Health Law Program writes it would support this bill if it were amended to instead establish integration pilot programs, as a prior version of this bill proposed.

Arguments in Opposition:

There is no known opposition.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, administrative costs estimated in the range of $100,000 to $200,000 (General Fund/federal) to convene and support the workgroup and to issue a report. This report will require significant legal and regulatory analysis.

VOTES:

ASM HEALTH: 15-0-0

YES: Wood, Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, Limón, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: April 22, 2019

CONSULTANT: Scott Bain / HEALTH / (916) 319-2097 FN: 0000727

Date of Hearing: May 1, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1058

Author:(Salas) – As Amended Ver:April 22, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of Health Care Services (DHCS) to engage in a stakeholder process to develop and report to the Legislature by September 15, 2018 recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring substance use disorders (SUD) and mental health conditions.

FISCAL EFFECT:

Administrative costs estimated in the range of $100,000 to $200,000 (GF/federal) to convene and support the workgroup and to issue a report. This report will require significant legal and regulatory analysis.

COMMENTS:

1. Purpose. According to the author, parallel or separate care delivery systems for mental health and SUD treatment have been shown to be ineffective for the treatment of co-occurring conditions. This bill seeks to identify specific barriers to provision of integrated care and to provide a road map to addressing the challenges of clients navigating multiple systems. It is sponsored by the California Behavioral Health Directors Association and has no opposition.
2. Background. Medi-Cal covers behavioral health services that are provided through three separate delivery systems. Treatment for so-called “mild-to-moderate” mental health care needs is provided by Medi-Cal managed care plans. Treatment for more severe conditions is provided by county mental health plans through specialty mental health services. Drug treatment is provided by county drug Medi-Cal plans. There are various degrees of integration within counties with respect to county-delivered behavioral health services, as well as between counties and geographically overlapping Medi-Cal managed care plans. Separate billing and client tracking systems as well as strict privacy laws complicate integration.

This bill’s findings note more than 30% of the population that receives mental health services for severe and persistent mental illness through the Medi-Cal Specialty Mental Health Services Program in California (county mental health plans) have co-occurring substance use disorders.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1058

Author:(Salas) – As Amended Ver:April 22, 2019

SUBJECT: Medi-Cal: specialty mental health services and substance use disorder treatment.

SUMMARY: Requires the Department of Health Care Services (DHCS) to engage in a stakeholder process to develop recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring substance use disorders (SUD) and mental health conditions who access services through the Drug Medi-Cal Treatment program, the Drug Medi-Cal Organized Delivery System (DMC-ODS) and the Medi-Cal Specialty Mental Health Program (Medi-Cal SMH Program). Requires the stakeholder process to be completed by September 15, 2020, and requires DHCS to report, by September 15, 2020, to the relevant legislative policy and fiscal committees the recommendations developed through the stakeholder process. Sunsets the stakeholder process January 1, 2021. Specifically, this bill:

1. Requires DHCS, commencing no later than January 15, 2020, to engage in a stakeholder process to develop recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring SUD and mental health conditions who access services through the DMC Treatment program, DMC-ODS, and the Medi-Cal SMH Program.
   
2. Requires the stakeholder group to be comprised of behavioral health subject-matter experts, behavioral health consumers or consumer advocates, providers who render mental health services and SUD treatment, legislative staff members, representatives from county behavioral health departments, and the County Behavioral Health Directors Association of California (CBHDA).
   
3. Requires the stakeholder group to do all of the following:
   1. Identify administrative duplication, inefficiencies, or impediments to implementing integrated behavioral health services in the Medi-Cal program that exist in law, including state statute and regulation, DHCS policy and guidance, such as the Mental Health and Substance Use Disorder Services Information Notices (MHSUDS Information Notices), and California's Medicaid demonstration project waivers, including related Special Terms and Conditions, as authorized under Sections 1115 or 1915(b) of the federal Social Security Act.
   2. Review DHCS policies and procedures on the DHCS’ implementation and operation of administrative and oversight responsibilities for the Drug Medi-Cal Treatment Program, the DMC-ODS, and the Medi-Cal SMH Program, to identify elements of those policies that produce administrative duplication, inefficiencies, or impediments to the implementation of integrated behavioral health services in the Medi-Cal program.
   3. Develop recommendations for changes to state statute and regulation, DHCS policy and guidance, such as the MHSUDS Information Notices, and the Special Terms and Conditions (STCs) of California's Medicaid demonstration project waivers authorized under Sections 1115 or 1915(b) of the federal Social Security Act that would remove identified statutory, regulatory, administrative, or other barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring SUD and mental health conditions who access services pursuant to the Medi-Cal program.
   4. Requires the stakeholder group to develop recommendations that address both of the following:
      1. Changes to requirements for Medi-Cal provider certifications, client assessment, treatment planning and related documentation, quality assurance and quality improvement activities, and data reporting for SUD treatment and mental health services provided pursuant to the Medi-Cal program that would reduce duplication of, and increase the efficiency and effectiveness of, services provided to Medi-Cal beneficiaries with dual diagnoses; and,
      2. Changes to billing and claiming requirements of the Drug Medi-Cal Treatment Program, the DMC-ODS, and the Medi-Cal SMH Program that would support greater flexibility of provider reimbursement for Medi-Cal benefits related to SUD treatment and specialty mental health services that are rendered to Medi-Cal beneficiaries with dual diagnoses.
   5. Identify recommendations developed through the stakeholder process that may be implemented as components of extensions, renewals, or amendments to any California Medicaid demonstration project waivers as authorized under Sections 1115 or 1915(b) of the federal Social Security Act.
4. Requires the stakeholder process to be completed by September 15, 2020, and requires DHCS to report, by September 15, 2020, to the relevant legislative policy and fiscal committees the recommendations developed through the stakeholder process.
5. Requires the stakeholder process to remain in effect only until January 1, 2021, and as of that date is repealed.
6. Makes legislative findings and declarations regarding the prevalence of mental health and SUD disorders and co-occurring disorders, that nearly every county has merged the administration of mental health and SUD services, but that reimbursement, county contracts with the state, documentation and reporting, oversight and other administrative requirements remain bifurcated, which produces inefficiencies and barriers to the provision of integrated SUD and mental health services. States legislative intent that it is in the interest of Californians in need of behavioral health services to develop integrated SUD and mental health services for Californians with co-occurring disorders.

EXISTING LAW:

1. Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income individuals receive health care services.
   
2. Establishes a schedule of benefits in the Medi-Cal program, which includes mental health and SUD services included in the essential health benefits package adopted by the state for purposes of implementing the Patient Protection and Affordable Care (ACA) requirement for benefits that must be included in health plans offered in the private individual and small group market and to the Medicaid expansion population.
   
3. Requires DHCS to implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans (MHPs). Permits MHPs to include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by DHCS to meet MHP standards. Permits a contract to be exclusive and may be awarded on a geographic basis. Requires MHPs to be responsible for providing Specialty Mental Health Services (SMHS) to enrollees.
   
4. Requires county MHPs to be governed by specified guidelines, which include a requirement that MHPs provide specialty mental health services to eligible Medi-Cal beneficiaries, including both adults and children.
5. Requires, through an amendment to the State Constitution enacted by Proposition 30 of 2012, legislation enacted after September 30, 2012, that has an overall effect of increasing the costs already borne by a local agency (including MHPs) for programs or levels of service mandated by the 2011 Realignment Legislation (which includes DMC and Medi-Cal SMH) to:
   1. Apply to local agencies only to the extent that the State provides annual funding for the cost increase; and,
   2. Prohibits local agencies from being obligated to provide programs or levels of service required by legislation above the level for which funding has been provided.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, parallel or separate care delivery systems for mental health and SUD treatment have been shown to be ineffective for the treatment of co-occurring conditions. The need for clients to navigate two systems and work with separate clinical teams can interfere with access to appropriate services. California’s DMC and SMH treatment programs remain bifurcated under state law. This structure creates administrative barriers to integrated care and can negatively impact access, quality and the client experience. Care providers and administrators must obtain separate clinical site certifications, observe different documentation and treatment standards, and claim reimbursement through separate mechanisms. For clients, care is too often shaped by the administrative requirements of each delivery system rather than the unique needs of the individual. To provide meaningfully integrated substance use and mental health care for Medi-Cal clients, California must identify effective treatment models and implement strategies to address separate DMC and SMH program requirements that currently produce inefficiencies and disincentives integrated care.
   
2. BACKGROUND. Medi-Cal mental health benefits are delivered through two separate systems and under a separate statutory framework from the Drug Medi-Cal benefit. MHPs provide a broad range of SMHS to individuals with more severe mental illnesses, while Medi-Cal managed care (MCMC) plans provide non-SMHS. The delivery of SMHS through MHPs is commonly referred to as a “carve out.” A “carve out” is when services covered by the Medi-Cal program are delivered outside of a MCMC plan. Services for physical and behavioral health (which includes mental health and SUDs) have historically been financed and delivered under separate systems. In addition to the two different delivery systems, Medi-Cal coverage of anti-psychotic medications are also carved out (with exceptions) from MCMC plans and are instead reimbursed through fee-for-service Medi-Cal. MHPs are responsible for providing SMHS to Medi-Cal beneficiaries who meet SMHS medical necessity criteria. SMHS are delivered through 56 county mental health plans (Placer and Sierra Counties and Yuba and Sutter Counties operate two separate dual-county combined MHPs). Medi-Cal beneficiaries that meet medical necessity criteria for SMHS are entitled to receive medically necessary SMHS from their county MHP, regardless of whether or not they are enrolled in a MCMC plan.
   
   Similar to SMHS, Drug Medi-Cal is also carved out of MCMC plan. The scope of DMC services varies by county depending upon whether the county opted-in to the state’s DMC-ODS. In August 2015, DHCS received approval from the Centers for Medicare and Medicaid Services to implement the DMC-ODS waiver. The DMC-ODS is a pilot project authorized originally under California’s Section 1115 Bridge to Reform Demonstration Waiver and continued in the Medi-Cal 2020 Waiver. The purpose of the pilot program is to test a new paradigm for organized delivery of health care services for Medicaid eligible individuals with a SUD. DMC-ODS waiver services include the existing treatment modalities, and additional new and expanded county optional services. Counties that opt-in to participate in the DMC-ODS waiver are required to provide a continuum of care to all eligible beneficiaries modeled after the American Society of Addiction Medicine criteria.
   
   In addition to the “carve out” from MCMC, county provided SMHS and SUD services are operated under a separate waiver on the state level with different levels of detail in state law and regulation. The SMHS delivery system dates back to the mid to late 1990s and operates under separate state law statutory and regulatory structure under a 1915(b) Medicaid waiver. While state law implementing the ACA expanded benefits and populations eligible for DMC services, the program specifics of the DMC-ODS are in the STCs of Medi-Cal 2020, in program guidance issued by DHCS, and in contracts between the state and counties that opt in to the DMC-ODS. The goal of the stakeholder process established by this bill is to develop recommendations for addressing the legal and administrative barriers to the delivery of integrated behavioral health services for Medi-Cal beneficiaries with co-occurring SUD and mental health conditions who access services in the DMC Treatment program, the DMC-ODS and the Medi-Cal SMH Program.
   
   CBHDA states that, unfortunately, California’s DMC and SMH Treatment Programs remain completely bifurcated under state law. This structure, in which clients must navigate two systems and work with separate clinical teams, creates administrative barriers to integrated care and can negatively impact access, quality and the client experience. For example, care providers must obtain separate Medi-Cal provider certifications, adhere to different documentation and treatment standards, and claim reimbursement through separate mechanisms. DHCS monitors and reviews mental health and substance use programs using distinct evaluation tools and performance measures. As a result of these parallel program requirements, care providers seeking to provide co-located, integrated services must expend substantial resources on duplicative processes and record-keeping. Client care is too often shaped by the administrative requirements of each delivery system rather than the unique needs of the individual. To provide meaningfully integrated substance use and mental health care for Medi-Cal clients, California must modify requirements of the DMC and SMH programs that currently produce inefficiencies and disincentives integrated care.
   
   CBHDA writes that the formal stakeholder process established through this bill is an important first step toward identifying and removing administrative barriers that have hindered the expansion of integrated behavioral health treatment programs. This bill would require a comprehensive analysis of current legal and administrative barriers to service integration and would engage a diverse group of stakeholders in developing recommendations for policy changes informed by clinical best practices. This planning process will ensure that DHCS, the Legislature, and behavioral health advocates are prepared to propose and implement new policies and benefit designs that will facilitate the expansion of integrated behavioral health care.
   
3. SUPPORT. This bill is sponsored by CBHDA, which writes that research has demonstrated that integrated treatment programs for people with co-occurring substance use and mental health conditions effectively promote recovery. Per the federal Substance Abuse and Mental Health Services Administration, integrated treatment occurs when the same clinicians or team of clinicians, working in one setting, provide appropriate mental health and substance use interventions in a coordinated manner.
   
   CBHDA states that, unfortunately, California’s DMC and SMH Treatment Programs remain completely bifurcated under state law. This structure, in which clients must navigate two systems and work with separate clinical teams, creates administrative barriers to integrated care and can negatively impact access, quality and the client experience. For example, care providers must obtain separate Medi-Cal provider certifications, adhere to different documentation and treatment standards, and claim reimbursement through separate mechanisms. DHCS monitors and reviews mental health and substance use programs using distinct evaluation tools and performance measures. As a result of these parallel program requirements, care providers seeking to provide co-located, integrated services must expend substantial resources on duplicative processes and record-keeping. Client care is too often shaped by the administrative requirements of each delivery system rather than the unique needs of the individual. To provide meaningfully integrated substance use and mental health care for Medi-Cal clients, California must modify requirements of the DMC and SMH programs that currently produce inefficiencies and disincentives integrated care.
   
   CBHDA writes that the formal stakeholder process established through this bill is an important first step toward identifying and removing administrative barriers that have hindered the expansion of integrated behavioral health treatment programs. This bill would require a comprehensive analysis of current legal and administrative barriers to service integration and would engage a diverse group of stakeholders in developing recommendations for policy changes informed by clinical best practices. This planning process will ensure that DHCS, the Legislature, and behavioral health advocates are prepared to propose and implement new policies and benefit designs that will facilitate the expansion of integrated behavioral health care.
   
4. SUPPORT IF AMENDED. The National Health Law Program (NHeLP) has taken a “support if amended position,” arguing this bill should continue in its prior version (April 11, 2019 version) to implement a pilot program to integrate delivery of behavioral health care services for Medi-Cal. NHeLP argues, because DHCS has a responsibility to ensure that Medi-Cal beneficiaries have access to medically necessary services (including behavioral health treatment), DHCS should reach a solution to these barriers to care without further delay. By allowing the DHCS to establish pilot projects in several counties that would provide SUD and mental health services in an integrated way, the previous language of this bill would have created a pathway for an integrated system statewide, where all beneficiaries have seamless access to needed care, both physical and mental, without having to jump though unnecessary hoops and without delay. NHeLP writes that postponing implementation of such pilot programs in favor of a stakeholder process to evaluate current barriers will only serve to delay the inevitable solution to the lack of access to SUD services, which is, as experts across the country have indicated, increased integration of behavioral health care systems.
5. PREVIOUS LEGISLATION. SB X1 1 (Hernandez and Steinberg), Chapter 4, Statutes of 2013, required Medi-Cal to cover the mental health and SUD disorder benefits in the essential health benefits adopted by the state.
   

REGISTERED SUPPORT / OPPOSITION:

Support

California Behavioral Health Directors Association (sponsor)

Opposition

None on file.

Analysis Prepared by: Scott Bain / HEALTH / (916) 319-2097