Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

The Senate Budget Subcommitee number three on health and human services will come to an order. Hello, everyone. Good morning. We continue to welcome the public in person and via the teleconference for your public comment. Today's teleconference number is going to be 187-726-8163 with access code of 736-2834. As always, we're holding our sub three Committee here in the 1021 street building in room 1200. I ask for the remaining subcommittees to come join me to establish a quorum. Don't think we'll have quorum today.

Today we'll be hearing budget proposals from two departments, mental Health Services Oversight Accountability Commission, the Department of Health Care Services. But before we hear those proposals, we again, no quorum. Never mind. Moving on. We were going to be taking out one item out of the proposed agenda to accommodate our American Sign Language interpretation services for one of our stakeholder proposals, which we usually hear at the end of our agenda. So I'd like to welcome Michelle Marciniak.

By this time, you should know I butcher every single last name, so I apologize. Who's the co chair and co founder of Let California Children Hear to present a proposal on the Let California Children Hear Act. Welcome. Hi. Just so you also know, we will also be taking in person public comment for this proposal out of order to accommodate interpretation services. Please proceed.

Hello. My name is Michelle Marciniak and I'm co founder of Let California Kids Hear. And this is my daughter Marie, who's been advocating for children's access to hearing aids in California since first grade. We'd like to thank the chair, the Committee leadership in both chambers, Senator Porntino and Assemblymember Dr. Arambula, for continuing to stand with our children in this multiyear effort. In 1998, California passed a mandate for newborn hearing screening, acknowledging the urgent need to screen, diagnose, and provide intervention for deaf and hard hearing children.

Yet today, access to hearing aids for children is not mandated, despite efforts over 25 years, Dr. Carvala at radies Children's testified, California does a beautiful job in screening and identifying our children, but fails miserably when it comes to treating them. In 2019, AB 598, the Let California Kids Hear Act, a Bill that would mandate health plans, cover hearing aids and services for children, received unanimous support in the Legislature. Okay, sorry.

As an alternative to the Bill, the Newsom Administration offered the hearing aid coverage for children program supporting families with incomes up to the 600% federal poverty level. Since the program began on July 1, 2021 it's received an annual budget of over 6 million to administer 10 million in benefits two months shy of the two year anniversary, with 32.8 million in total funding. Less than 200 of the 7000 children have received hearing aids through this program.

Despite significant implementation issues that impeded utilization in the first 22 months, DHCS is now valuing the program at 1.6 million, an 83% reduction, while maintaining 6.1 to administer it. Our biggest concern is the program is not recession proof for some of the most vulnerable children where the mandate is. Additionally, few pediatric providers are participating due to historically Low reimbursement rates, creating poor geographic coverage, segmented care and barriers that are difficult to overcome.

California is not alone in these challenges, as Georgia tried a similar program and failed, ultimately passing a mandate in 2018. Assembly Member Dr. Arambula said at the Assembly Budget Subcommitee hearing last month I'd like my legislative colleagues and the Administration to have an honest conversation about whether it's time to reopen the discussion about a requirement for commercial plans. The Let California Kids Hear act is better positioned, with significant momentum across the country with federal and state efforts.

The Biden Administration and HHS secretary have demonstrated a strong commitment to help hard of hearing adults with overthecounter hearing aids and recent efforts to cover seniors at the federal level, this opens the door for children. In 2024, over 30 states will require support for pediatric hearing aids through a state requirement and or the inclusion in the state's essential health benefits benchmark selection.

In fact, eight states passed sorry mandates after the 2012 ACA provisions went into effect, and another five states are considering requirements during the 2023 legislative cycle. California is not one of them. Today, our coalition is asking to revisit the Let California Kids Hear act with modifications that address the administration's previous concerns.

The Bill would reduce barriers to time sensitive care and provide the treatment needed for the 8000 California families sorry currently without coverage for their child's hearing aid for the HACCP pre program has been unable to serve to date. This requirement would allow-

- ask for you to wrap up. You get three minutes for your proposal.

I'm so sorry.

Go ahead.

Okay. This requirement would allow families to use commercial plans supporting access to local providers in the community. Currently, there's no providers in Sacramento, none in Central Coast and in LA. The first major center only came on in July. Kids from LA are calling the Central Valley to use their benefit. A mandate would significantly reduce and possibly in the future eliminate the need for the program that had an annual fiscal budget of 16.1 million.

The program could be scaled down to serve children on self insured plans for which the mandate would apply. Local UCSF expert Dr. Chan testified in the Senate. Pediatric hearing loss is considered a developmental emergency requiring timely intervention to prevent permanent delays.

Thank you. You'll have to wrap up. Okay.

Two sentences. These preventable consequences are not only devastating to the child, they are to the society.

Research shows that children aided by three to six months of age can develop at the same rate as their hearing peers. But please let California kids hear and help us get across the finish line. Thank you for hearing about our future.

Thank you. What's your name?

Marie.

Marie, thank you so much. Well, I would say to that I agree with my counterpart on the know, the chair for sub one, which is reflective, which is the same as sub three here. I do want to ask my colleagues and the Administration to reevaluate this program because it's not working as we intended to and it's costing more money to just implement the program versus the services that we're giving out the door to our children. So I do join in his efforts as well.

And I thank you for coming up here and sharing your proposal with us. I don't have any of the questions, as you can see, no other Committee Members here yet, but I appreciate your proposal. So we'd like to open it now to anyone who'd like to come and give public comment on this item to please step forward.

This right here? Right here. Okay. Hello. My name is Casey Kane. I am a resident of Placer County and I'm a mother of two. My son's first pair of hearing aids put our family back almost $1500. We were fortunate that our insurance covered a portion of that cost, but not all. Our family applied to the hearing aid coverage for children program when it was first became available. For months we went back and forth with paperwork. We sent in all the documents asked of us, but then they needed more information. They sent us a self addressed envelope which was then returned to me as undeliverable as addressed.

We then started to receive calls informing us that our file would be closed due to them not receiving the forms that they asked of us. At this point, my son desperately needed a new hearing aid for his left ear and we couldn't wait. A new hearing aid, one new hearing aid with partial coverage poured our family back another $1100.

It was easier to simply pay out of pocket, but I know it hurt our family, and I know the cost is going to hurt other families, and this is with partial coverage. The program needs improvement, and to do that, it needs to be continued to be funded and bring back a mandate that would be most efficient in serving our children. Thank you. And allow our families to stay within the medical home. Thank you.

Thank you so much.

Hi, good morning. My name is Leslie Manjaris, and I'm a teacher of the deaf who works and serves families in San Francisco. I'm here in support of the program because I believe that families have the right to accessible resources. The majority of the population in California does not speak English, speaks Spanish. As a provider who is trilingual, I often have to explain these resources in Spanish to different families.

Currently, materials in Spanish were only made available a few weeks ago for this vital program, and children's hearing aids deserve a chance to reach these families. Navigating programs like these are often overwhelming and difficult for families, and the parents themselves has made it a lot more difficult to access due to the language barriers. There are a lot of paperwork and things that we give as providers, just piles and piles of things that we give often in home visits.

I'm an early intervention provider, and often these are not in native languages. And so it makes it that much harder for families to navigate and access the programs. And so the implementation of the program is a very important piece for the Committee to consider. And regardless of these piles and piles of programs of papers, we really should use early start as an avenue.

Appreciate it. Thank you.

I am Nancy Sager, and I am retired as the deaf and hard affairing programs consultant at the California Department of Education. And I continue in my retirement to volunteer with California Hands and Voices, which is a parent support organization for parents of deaf and hard appearing children. So I just want to express that California hands and voices supports this program with full funding. It has had a rocky start because of the implementation of the program, but with full funding, it should be able to get up off its ground. Thank you anyway.

Thank you.

Hi. My name is Caprice Shuler, and this is my daughter, Avery Shuler. Not high enough. Thanks. And we live in Lodi, in San Joaquin County, and Avery wears hearing aids. And the program, we qualified for the income level, but because we had partial coverage when the program came out, we didn't qualify for it. We couldn't wait.

We had to buy her hearing aids, and it was $4,000 out of pocket, and then they ended up adding the partial coverage, but then the program still doesn't work for us because of the lack of providers, and so there's no providers near us. And we also don't want to leave her audiologist to go to a stranger audiologist. So we need a better solution for our kids. Thank you.

Good morning, Senators. My name is Johanna Wonderley and I'm from placer, California. I am the parent of DHH Children's and a parent leader in the greater California area or greater Sacramento area. The hearing aid program. The HACCP requires that children covered by their insurance that they be seen by their insuring provider for those appointments, and then they get shuffled to their HACCP provider for their ear molds for their hearing aid services. That means being programmed and to actually get dispensed the equipment.

As you are aware now that there are no providers in Sacramento, our children are driving over 100 miles to be served by this program, and you need new ear molds one to four times a year. You need hearing aid programs anytime a hearing aid changes. So when you're doing an appointment with your hearing aids off, you can see your insured provider, and then you have to wait to be served by an HACCP provider in order to have those hearing aid programs changed.

These appointments are time away from work. Our students are missing class. The lag time between knowing that there's a need and change and programming and to time when that can happen is time where access to language, classroom instruction, social emotional health are diminished. The lack of accessibility and utilizing this program means that it fails to have value to our Sacramento area families. We are looking to you, our leaders, to bring forth the mandate. Thank you.

Hello. My name is Denise Kyles-Jensen. I live in Placer county as well. I have two deaf sons with hearing aids. They are 10 and 13 years old. They're both on their third set of hearing aids since identification and more ear molds than I can count over the years. The cost of hearing aids for kids is extremely hard on our families. I am here in support of a mandate for hearing aid coverage for families. Thank you.

Thank you.

Hello. Nora Lynn with Children Now. Children Now supports the Let California Kids hear Act and appreciates the Committee's consideration of our proposal to ensure children have timely access to hearing aids.

Thank you so much. Seeing no one stepping forward for more public comment. I appreciate, again, the stakeholder coming in to make that presentation. We're going to hold the item open and go back to in order of our agenda. I'm going to welcome up the Administration presenters who are going to give an overview of the Mental Health Services Oversight and Accountability Commission. Beginning this item issue one. Welcome LAO and DOF as well.

Morning Madame Chair, members. Toby Ewing on behalf of the state's mental health services oversight and accountability commission. Appreciate the chance to join you this morning to talk about the work of the Commission and the budget requests that you have in front of you. Very quickly in terms of an overview of our mission and programs. We're an advisory body to the Governor and the Legislature. We have a range of functions. We administer grant programs that are really designed to incentivize attention on key challenges facing our public mental health system.

We shape and support innovation that is really designed to drive transformational change across California's system. That's an essential element of the Mental Health Services act because it's the primary way in which we can ensure that counties are consistently working to improve the kinds of programs that are available to Californians. The Commission facilitates collective learning and systems improvement. We're doing this work in areas to reduce justice involvement, strengthen school mental health, address suicide, reduce costs associated with people cycling multiple times through services.

We work to elevate the voices of youth and communities. We do policy research and develop recommendations for the Legislature's consideration. We've done this work in suicide prevention, school mental health, justice diversion, fiscal reversion. We recently released a report on workplace mental health as a strategy to support improved mental health outcomes.

And we've been working, actually with the Senate leadership on the administrative side to provide mental health first aid training and related supports to your team, given the kinds of stresses that you're seeing into the work that you do. We're currently working, thanks to the work of Senator Eggman, to focus on and strengthen full service partnerships, which are a core element of our mental health system. And we have a project on firearm violence and the impacts, the mental health impacts of firearm violence across the state.

In addition to that, the Commission has a range of data and analytic functions, including elevating fiscal transparency so that public and policymakers can understand how we finance mental health services in this state and the outcomes that are achieved with those dollars. Happy to answer any questions about this portfolio. Also recognize you've got a long agenda in front of you.

No, no questions, seen no other. We're going to move into issue number two.

The Commission, as outlined in the agenda, is seeking reappropriation authority in three areas to support our work supporting youth drop in programs known as Alcove programs. Alcove is a model program based on an effort out of Australia. It's being replicated in about six countries around the world. It is a very elegant approach to actually begin with young people and ask them to design a youth drop in program that addresses, that integrates physical health and mental health care.

We're seeing dramatic negative impacts because of COVID isolation, economic stress, and related challenges for young people. One data point suggests that as many as two thirds of girls across the country feel an elevated level of hopelessness. We're seeking reappropriation of these funds because we've distributed funds to local agencies and they've returned them to us, citing an inability to actually use them.

Sorry, are you talking about issue three?

Oh, apologies.

Issue two, information technology and security.

Thank you. Pardon me. Issue two. I was talking about issue three. I was excited about that one. Issue two, we're seeking a budget change proposal to bring two new IT staff into our work as we've gone to remote work as we've grown.

As the Commission works with HIPAA protected, federally protected personal health information as part of our effort to monitor outcomes, we find ourselves in a position that we're unable to meet all of the it and security needs that are required for us to comply with federal and state data security and related rules.

And so the proposal in front of you again, pardon me, on issue two is to add to additional IT staff to make sure that we're following all the rules and not creating undue risks with regard to our it and data work.

Thank you. LAO, Department of Finance. Any comment?

Ileana Ramos, Department of Finance, here to answer any questions.

Will Owens, LAO. We have no concerns with this proposal.

Great. Seeing none, we're going to hold the item open and now continue with issue three. You don't have to say what, you already said it.

I won't say it again. Thank you. Each of these three reappropriations in item three are a result of challenges that we've faced in supporting our local agencies to strengthen their mental health programs. The first item, alcove youth drop in. We did a competitive procurement. We released funds to a series of counties. One of those counties returned the funds. We'd like to redistribute those funds to a county that had applied that we were not able to Fund early psychosis intervention.

We have some unspent funds, approximately $1.7 million. Best available research shows that about 27,000 Californians will develop psychosis first episode psychosis this year. Only about 10% will access services within that first year of the onset of psychosis. Only about half of those actually will receive what is considered to be best in class treatment. And the extraordinarily negative impacts of psychosis that goes untreated on individuals, families, and communities drives up public sector costs.

We want to invest these unspent funds to better understand the gap between where the State of California needs to be in responding to psychosis, where we are today, and to put together a game plan to bring before the Legislature and the Administration to really drive all efforts that we can to address first episode psychosis early with a considerable recognition that that is a primary cause of the large number of folks who are homeless and severely and persistently mentally ill.

It is a large driver, we believe, of the tremendous need for more state hospital beds. The Legislature has made investments that are increasing those costs by 500 or $600 million a year ongoing, and we are anticipating that stronger early intervention into psychosis can actually drive down those numbers and then again reduce justice costs as well. The third proposal, the Mental Health Wellness Program, at a point in time, the rules regarding how these dollars were used put restrictions on how counties could use them primarily for staffing.

Those rules were changed more recently to allow greater flexibility. Counties have returned funds to the Commission because they've been unable to use those funds under the prior restrictions, which limited them to staffing purposes, and so they've returned those funds.

We want to reinvest them under the new rules, which offer greater flexibility with specific emphasis on strengthening how communities respond to people who are in immediate crisis, who end up in a hospital emergency Department so that we can reduce the demand on limited number of psychiatric beds that we have in California, increase access to community based care, reduce costs and improve how we support people who are struggling with mental health crises at a point of their most acute need.

Happy to answer any questions you have about the overall reasons behind that or any of those three specific programs that are in front of you today.

Thank you. LAO, any comment?

Will Owens Lao, we have no concerns with this proposal.

Perfect. Just quick question. As the county's return it back now with the new eligibility criteria, is it going to go back to the county for them to utilize in those new sectors that you mentioned?

Department of Finance?

We have no additional comments.

Yes. Not necessarily the counties that are returning it. Right. So the way we distribute these funds is we do a competitive procurement and counties apply. And so typically what happens is we'll have enough money to Fund seven programs, but there's 15 applicants. And so what we want to do is take the funds that would otherwise just stay within the state's mental health Fund.

It's not a bad outcome, but given the high level of need, the fact that we already have counties that have applied for the more flexible uses of these dollars, the fastest way that we can put those dollars back into the community to address these needs is to Fund the applicants that already applied, but we were not able to Fund.

Perfect.

So county A may have returned the funds. That does not mean that county A would get the money.

Got it. Okay. Well, I do appreciate. I think it's important to address the flooding, but we also got to go to the dam and fix the dam so no more flooding comes out. So this is the early intervention and prevention is very key. Just a quick anec.e. I was in Columbia a couple of weeks ago in a delegation and their metro stations have mental health hubs for community mental health. A quick fix, meeting the community where they're know things like that.

Are still working with colleagues here in my team and seeing how we can implement community mental health in that way. Right. Meeting the client or the community Member where they are perhaps after a long day of work or coming from home, going to work and dealing with the personal stressors. So just throwing that out there because really interested in how we're reimagining mental health in our communities. So thank you so much. Any other comment?

Nice to see you, Mr. Ewing. On the early psychosis and intervention program, you said counties returned that money or didn't use it because of COVID?

Not the $1.7 million on the other two of the three. The other two, those funds were returned to us. The 1.7 was never utilized, in part because we set that aside for research and analysis but on the Commission's end, we did not have the bandwidth to actually invest that at the time because of the work that we were doing broadly around Covid.

Okay. All right, thank you.

Thank you. We're going to. No other questions. We're going to hold that item open. Want to thank you for coming out and giving overview and presenting your BCP's. We'll now continue on to our next item on the agenda.

Thank you. Apologize for my enthusiasm.

No, it's a good topic. Next on our agenda, we're going to be hearing an oversight panel discussion on the continuum of behavioral health services in California. We'll begin with a presentation from the California Health and Human Services Agency, the Department of Managed Healthcare and the Department of Healthcare Services on the following budget proposals related to the continuum of behavioral health care.

Behavioral health community based Continuum Administration, the 988, suicide and crisis lifeline as it relates to AB 988, the Care Act and a budget solution for the delay in behavioral health, continuum infrastructure and bridge housing. Go ahead. We'll start off.

Thank you. Good morning, Madam Chair. Tyler Sadwith, Deputy Director, behavioral Health Department of Healthcare Services. The proposed California Behavioral health community based continuum demonstration seeks to improve care for adults living with serious mental illness and children with serious emotional disturbance. The demonstration has multiple components, all of which are really designed to expand access to evidence based behavioral health care in the community.

It will allow California to draw down federal matching funds for some short term stays in inpatient and residential mental health facilities, which allows our Medicaid dollars to go further.

Through the waiver the Department aims to expand the continuum of community based behavioral health care for Medi Cal Members, improve the quality of care delivered in residential and inpatient settings, strengthen transitions from these settings to the community, enhance county accountability and oversight and support the implementation of new benefits through incentives, robust technical assistance and practice transformation supports for counties and for providers. The Department intends to apply for this waiver in 2023 and subject to CMS approval, would begin a staged implementation in 2024. I can provide more details in the upcoming issue related to this topic that.

That works.

Madam Chair Members Kimberly Chen here, on behalf of the California Health and Human Services Agency, federal law has designated 988 as the new three digit number for the National Suicide Prevention and Mental health crisis hotline. To adequately and sustainably Fund the 988 system, federal law authorized states to impose a fee on access lines for providing 988 related services.

Assembly Member Bauer-Kahan's AB 988 was signed by the Governor last year to support the broader implementation of the 988 suicide and crisis prevention hotline. In addition to imposing the fee, the Bill also required the Administration to convene a number of advisory committees to develop recommendations for an implementation plan and established commercial coverage requirements related to 988 services. Before you, we have a joint budget change proposal and trailer Bill Language to support the implementation.

I will give an overview of that joint BCP and trailer Bill and we have a staff here from DHCS and DMHC to provide more specific details if you have any further questions. From the Cal HHS side, we are requesting one time 5.5 million from the 988 fund to support contracting funds. This is going to go towards our five year implementation plan efforts.

It will also support our efforts in coordinating with Cal OES for the statewide coordination of the 988 and 911 and behavioral health crisis services. From the DHCS side, 1.5 million total funds and 10 positions to support the oversight of county behavioral health compliance with AB 988, as well as stakeholder engagement on participation in the Advisory Committee.

There is also 4 million requested to support 988 call centers from the DMHC, 2.2 million from the managed care Fund to support oversight of health plan compliance with AB 988 Services, specifically health plan responsibilities to cover services. I can go to the trailer Bill Language at this point. Okay, great.

The trailer Bill Language includes well, consistent with the governor's signing message, the agency has proposed cleanup trailer Bill Language to support the implementation of the Bill. The trailer Bill Language includes updates to the definition of 988 to better align with federal definitions. We have also made recommendations or included language to support aligning commercial and medical coverage.

We have also made recommendations in the trailer Bill link or include in the trailer Bill Language changes to the five year implementation plan, including providing an additional year for our agency to convene and develop that plan. There are a number of other provisions related to the commercial coverage side which I'm happy to go into detail or ask my colleague from the DMHC to speak to, but I'll just stop there at this point to take any questions or have the rest of the panel continue.

If you're okay, Senator, I'm going to finish and then we'll ask questions after.

The requested resources will provide training and technical assistance to county behavioral health agencies, administer technical assistance and training for volunteer supporters on the CARE Act process, and it would help support the retention of an independent research-based entity to develop an independent evaluation of the effectiveness of the CARE Act.

Great. We'll turn to LAO for any comment on the three issues.

Good morning. Ryan Miller, Legislative Analyst Office. We plan to offer some comments on some of the proposals as they come up later in the agenda, but don't have anything to add for the oversight discussion. But we are available for questions.

We just went through issues three--two, three, and four.

Okay. Apologies for that misunderstanding. Concerning Issue Three, we do not have any concerns with the proposal, and I believe my colleague Will Owens has some comments on Issues Two and Four.

Great.

Hi. Thank you, Chair. So again, Will Owens with the LAO. So, specifically, kind of talking through here, Issue Two on the Community-Based Continuum Demonstration, we generally find that a lot of the proposals within the demonstration align with many of the efforts that the Legislature and the Administration have undertaken in recent years to expand community-based behavioral health.

However, at this time, as we've not seen the final demonstration as it will be submitted to CMS, we haven't been able to do a full assessment of this proposal. We're available to answer any questions, however. Moving on to Issue Four, the CARE Act, so, in the budget or in the agenda, this issue is primarily about the BCP request from DHCS.

And while we have no concerns about the BCP in particular, earlier this year, we published a number of recommendations regarding the CARE program as a whole, and we are prepared to present those before the Committee and discuss them at the Chair's discretion, of course, and are also available for questions.

Perfect. I'm interested in bringing you all back for that overview of the recommendations, but not today. So thank you so much on those issues. Department of Finance, any comments on Issue Two, Three, or Four?

No additional comments. Thank you.

Perfect. Thank you. Yes. Issue Five, before we turn to questions. Apologize.

So, as a result of the state's projected budget, the Department will delay 480.7 million dollars allocated for round six of the Behavioral Health Continuum Infrastructure Project, or BHCIP for short. BHCIP provides 2.2 billion dollars in grant funding to create new capacity in behavioral health care facilities and is structured to release funding through six separate rounds, with each round targeted on specific needs in the Behavioral Health Infrastructure Continuum.

Rounds one through five of BHCIP are underway and the sixth round of funding is focused on unmet needs. That is currently in the planning phase with an anticipated release in fiscal year 24 and 25 and fiscal year 25-26 as proposed in the Governor's budget.

Because the sixth round of BHCIP proposes to focus specifically on remaining gaps in infrastructure capacity, delaying round six actually increases time for the Department to conduct a more thorough and data-informed gap analysis and evaluate the needs of the state based on implementation and lessons learned from rounds one through five. The second item proposed as a budget solution is a funding delay associated with the Behavioral Health Bridge Housing Program.

The 2022 Budget Act provides one billion dollars in general funding for Behavioral Health Bridge Housing in current year, with another 500 million dollars in General Fund planned for budget year. The Governor's budget delays 250 million of the 2023-2024 funding until 2024-2025, given the state's projected General Fund revenue decline. In addition, due to updated timelines to release funds, 50 million dollars of the funding approved for current year is expected to be spent in budget year.

The Department continues to prioritize housing for homeless individuals with serious mental illness and behavioral health conditions. Delaying these investments in housing and services will provide the Department with additional time to implement the current rounds of funding, including a 907 million dollar RFA that was recently released, while providing additional time for planning the delayed rounds.

Thank you. LAO, any comment on this issue?

Yeah. We evaluated these two proposed delays, of course, in the context of what's expected to be a significant budget problem this year. First, concerning the proposed partial delay of BHCIP funding, given the substantial progress that's already been made in allocating the total funds that have been allocated for this purpose, as well as the long-term nature of the projects being funded, we thought that this was a reasonable place for the Administration to look for a budget savings.

Moreover, as Mr. Sadwith pointed out, the sixth round of funding that's being proposed for partial delay would be for remaining gaps after the first rounds, and we think that it may be an opportunity to do a more robust evaluation of that.

Second, concerning the proposed delay of Bridge Housing funds, I think our assessment sort of follows the assessment of the first proposal in that part of the justification for the Bridge Housing funding was to provide--to support Bridge Housing alternatives in the interim until projects supported by BHCIP and other related efforts come online. And so, with a proposed delay of the BHCIP funding, I think we thought it was reasonable for there to be an associated delay of the BHBH funding. Happy to answer any questions about that.

Thank you. Department of Finance.

No additional comments. We're here to answer any questions.

Great. Thank you. Okay, so this approach, Senator, was a little different. So I'll start off with questions on Issue Number Two on the BHCIP demonstration. I don't have any questions on Issue Two. Great. Okay, perfect. Moving on to Issue Number Three, on 988, I do have just one quick question. On the trailer bill language, one of the last points were the delay of the deadline to create a set of recommendations. Could you further clarify the recommendations to move it forward or as it's implemented?

No, the deadline is to--the date change is the deadline by which the agency has to produce the report.

Got it. Perfect. Okay, thank you. Senator Eggman on.

My question was just on, but LAO addressed it. I just thought for the Bridge Housing, are we sure we're not delaying anything by delaying implementation of round six? Because, as I understood, the first rounds went pretty quickly.

Pardon me. So the Department really is viewing round six as intentionally designed to address unmet needs. And so for that reason, while we have successfully released funding for the first four rounds and anticipate round five shortly, the slight delay would really support the Department to sort of see progress on initial implementation of facility construction or expansion based on funding dispersed to date. And so the delay is sort of consistent with the intended concept of the round, which is addressing gaps that remain.

And is there broad representation across the counties about who received the first four rounds? Awards?

Yes. There's a great geographic diversity and infrastructure type in terms of the recipients. I'd be happy to share information now if it would be helpful about the grant awards that have gone out in rounds one through four.

Just as long as you can provide that information to the Committee.

Absolutely.

Thank you.

I did share some concerns as well, that I was just wondering if this would undermine the whole goal of the Behavioral Health Continuum. With this delay, recently we heard regarding STRTPs and new stakeholder proposals are creating a whole new program on staff, given that they felt there weren't enough beds for our foster youth with complex needs in the STRTP. So just want to make sure that we're not delaying any great progress that we've have done so far through the round one through five.

So I heard some of the responses you gave. Just wanted to put that out there as well. Any other questions, Senator, on Issues Two through Five? We're going to hold items--Issues Two through Five open. Thank you so much for your presentation--

We're going to do more on the 988 later or was that it for the 988? Okay. All right. So if I could just ask then, how is that rollout going, because I've read articles, I've seen things that people are waiting four or five hours after they call. So what are the bumps that we're encountering and how do we smooth those out?

Sure. I'd actually like to ask Deputy Secretary Stephanie Welch to speak to the implementation. She's much closer to the on the ground issues.

And Senator, we'll hear from Counties in our next panel as well.

So we really started with 988, thinking of it as a developmental process. So the most important thing when we switched over to the 988 number last summer was to make sure that our crisis call centers had the capacity to take the increased volume in calls, text, and chats. And that's really where the Department has invested their resources. General Fund was 20 million, and SAMHSA was another 14.5, I believe. And there's been great success with that.

We'll acknowledge that the overarching vision, in particular in our state as well with AB 988 implementation, is for individuals who are in need of a crisis response, that they have access to a mobile crisis response, and ideally a mobile crisis response that doesn't involve law enforcement. I'm sure you'll hear both from our county partners, as well as from Didi Hirsch, who will be here later, that we are working hard to build that capacity.

But the reality in a state our size is that we really are in different places. We've made some investments, and I actually want Deputy Director Sadwith to maybe share a little bit about our mobile crisis investments to build out that infrastructure for mobile crisis response that doesn't involve law enforcement. And historically, those teams have really been funded by maybe some MHSA dollars and frankly, also public safety dollars to build out those teams.

And now we have this incredible opportunity with our Medi-Cal Program to receive reimbursement for the work of those teams, which will greatly enhance the county's capacity to build out those teams.

So I acknowledge that we have work to do in communicating and making sure that people are aware that if they call 988, but they really want mobile crisis, that that may be something that is not--and I mean mobile crisis that's specifically non-law enforcement involved based on the articles that I've read as well, Senator--that we need to work on that communication. So part of agency's responsibility in the next year and a half is to develop a plan to also include how are we going to communicate about this.

Because what maybe one particular county is able to offer is not going to be necessarily the same as what another county is able to offer, but we are building towards that and are committed to that and look forward to taking any additional questions. And I don't know, Tyler, if you want to share a little bit about--

Before that, it sounds like if we're delaying the infrastructure and Bridge Housing that includes more mobile crisis infrastructure infrastructure, it's going to further impact the implementation of 988. Correct?

Thank you, Senator. To clarify, the Behavioral Health Bridge Housing is not authorized to fund mobile crisis response.

But the infrastructure program is?

The BHCIP. So round one of BHCIP, which has already been issued, was squarely focused on mobile crisis. The Department awarded 163 million dollars to 49 county, city, and tribal teams to either expand existing mobile crisis teams or develop new mobile crisis teams, resulting in 245 teams supported through that funding. So that was the focus of round one. Round six is again unmet needs. So the parameters or the specific areas of focus have yet to be defined.

Well it sounds like it's already been defined in this area with mobile crisis needs.

I'm not sure I understand the question, but I think developmentally, I think those dollars went out about a year and a half ago. Knowing that this was coming, counties got the infrastructure dollars to start investing in their mobile crisis teams through the first round of BHCIP. They've been doing that and very aggressively. Now we're going to have the ability, through our state plan amendment, to receive Medicaid reimbursable services for those teams. Another major important developmental milestone. We still have to build additional capacity.

I think that we could use the rest of this decade to really do that, to be honest with you, but between our workforce investments, we need people on those teams, as well as the work that our 988 call centers are doing. I do want to, as I always do, take the opportunity that while it's really important to focus on the mobile crisis component--that's really critical--most people who call 988 do not need a mobile crisis response.

So it's still also incredibly important for us to have strong crisis call centers that can deescalate crisis and also provide culturally competent services in language services. And so we really have been focusing on the importance of preventing crisis while also taking the time to be thoughtful to build out our mobile crisis response in a way that's going to work for individual counties.

I would just also point out to the Chair that Director Welch is a MSW and ask you what you think about the idea of having mobile teams in metro stations, little mental health hubs.

I heard that and thought that was incredibly creative. I couldn't agree with you more. Obviously, I'm a social worker, so we meet people where they're at. That's our mission. And it was an excellent idea that I wrote down.

Awesome. Let's talk about that more later.

Thank you.

Perfect. Seeing no other questions, now we'll be holding Items Two, Three, Four, and Five open. Like to thank you for all your presentations and move on to our next panelists. Joining us on Zoom, we'd like to welcome the County Behavioral Health Director Panel. We have Stacy Kuwahara, Behavioral Health Director for Kern, County, Phebe Bell, Behavioral Health Director for Nevada County, and Dr. Lisa Wong, Director of Los Angeles County Department of Mental Health. Oh, Dr. Wong, I've been trying to meet you. This is a good way to start. Yay. I know we have a meeting coming up soon.

Yes, I really look forward to it, too. Thank you for having us today. So good morning, Madam Chair and Members. My name is Dr. Lisa Wong, and I'm the Los Angeles County Department of Mental Health Director. LA County has been a leader in suicide prevention and behavioral health crisis services in our state and nationally for decades. In fact, our partnership with Didi Hirsch goes back to our first contract with them almost 60 years ago.

For California as a whole, the passage of MHSA almost exactly 20 years ago was a game changer in helping counties to build out the foundation of our statewide suicide prevention and response network. For example, in 2011, counties pooled our MHSA dollars to fund Didi Hirsch to build out our National Suicide Prevention Lifeline centers throughout Southern California and made a strategic investment in building out core Spanish language capacity for the network that benefits the county as a whole today. And in addition, LA has been doing mobile crisis services for more than three decades.

Oh, really?

In more recent years, we focused our attention on redesigning a comprehensive crisis continuum as an alternative to law enforcement and justice involvement through our ACR, Alternative Crisis Response initiative. Just before the passage of the national law establishing 988 as an easy to remember three digit number in 2020, LA County brought together community groups, our 988 call center partners, as well as law enforcement, hospitals, and other core partners, and engaged our local communities for over a year to inform our system redesign.

Our communities emphasize the need to limit law enforcement engagement as much as possible as part of our behavioral health crisis response. We consulted national experts and developed a comprehensive plan, which resulted in a plan to further transform our system over the next 18 months to divert calls from 911 to 988. Currently, LAPD is diverting and we plan to add five more jurisdictions this year, almost double our mobile crisis teams from 35 to 60, and expand to 24/7 coverage to implement the new Medi-Cal benefit.

We want to build out our youth crisis capacity and more than double our adult crisis residential capacity from 160 to over 330 beds. And beyond the concept of someone to call, someone to respond, somewhere to go, LA County added a fourth prong, which is someplace to treat, which in our case means a commitment to linking individuals in crisis with ongoing services which we know are so important.

I have to underscore that what was laid out in the federal passage of 988 was an opportunity to simply simplify access to the National Suicide Prevention Line and to expand their mandate to include mental health crisis services access through their phone line, along with the fee to support the call centers and connected services.

LA County is proud to co-sponsor AB 988 because we believe in the promise of building upon this federal law to take our Behavioral Health Crisis Continuum to the next level. We're at the dawn of this transformation, however, and it will take time to build up and out, particularly in a region as vast as LA County. In my short tenure, I started as acting last July. I focused aggressively on strengthening my workforce as a whole.

I'm proud to say that my team and I have increased hiring in my county by more than 200 percent in the past year, but finding skilled crisis workers who are willing to work field-based overnight shifts in this competitive job market is still a challenge. Our nation has never before acknowledged the need for a comprehensive behavioral health crisis system, and the good news is we're not starting from scratch.

Counties are grateful to the Administration and the Legislature not only for supporting this evolution with putting forward infrastructure grants and the Medi-Cal Mobile Crisis Benefit, but also for your commitment to trying to ensure that we can one day bill and receive reimbursement for the crisis services delivered to the two out of every three Californians with some form of private commercial insurance.

We have to remember that 911 and the connected medical emergency crisis system was not built overnight, and in many ways, this is year one of a multiyear effort to build out our vision. I'm happy to answer any questions.

Thank you so much, Dr. We'll move on to Stacy from Kern County.

Hello. Stacy Kuwahara. Good morning, Madam Chair and Members. I'm Stacy Kuwahara. I'm the County Behavioral Health Director for Kern County, and I'm President Elect for CBHDA. So it's an honor to be here today to talk about our county's 988 and our crisis continuum. Kern County is unique. We're one of the two counties, along with Santa Clara, that's operating our own 988 call center.

So under state law, every county is required to operate a 24/7 access line to link individuals for screening and services for mental health and substance use. We've been able to leverage our access line staff and resources and integrate the 988 call center into that team and that function.

So what it means is we're providing a comprehensive array of services and connections that will include our mobile crisis dispatch for the 988 callers. At present, those 988 callers are about less than a third of the total access line call volume that this group is currently taking for Kern County.

In addition to doing that, which is, I think, interesting and unique, Kern County has also embedded a clinician into our 911 call center, working alongside 911 dispatch to triage and refer crisis calls that are appropriate directly from 988 to either our mobile crisis team when they're already connected to an outpatient team, or at times, if they're not connected to our 988 call center, to facilitate that linkage. In the broader continuum, Kern County has two decades worth of experience with mobile crisis services.

We started our program in 1999, launched it as a partnership with local law enforcement. The partnership at the time was really the best way, if not the only way, to immediately identify and connect individuals that were having a behavioral health crisis. This is the legacy of mobile crisis infrastructure that many other counties throughout our state are experiencing. Our mobile crisis team has been built responding at the request of law enforcement.

We have built a few co-response teams also, but the majority of them drive separately and are dispatched by law enforcement. We've seen some real strengths in the way that we've worked to triage crisis and address emergency needs in the community by working in these partnerships with law enforcement agencies. I would say that our law enforcement agencies definitely appreciate and understand the distinction between the public safety concerns and the behavioral health crises.

We, Kern, like our other counties with legacy mobile crisis systems, are very excited to be taking advantage of the opportunities that the new Medi-Cal Mobile Crisis Benefit and the related federal funding allow to build out a mobile crisis system that will continue to coordinate but does not rely on law enforcement as the key access point. We see that as very important and valuable for our community. I wanted to highlight also our crisis system is also supported by an adult and youth crisis stabilization unit.

This is really essential in the entire continuum. Our crisis stabilization unit is a 5150 receiving facility, but accepts voluntary walk-ins, kind of operating like an urgent care for mental health or substance use services. The demand for services at our crisis stabilization is far greater than our current capacity. We also have a sobering station for people to go to where that's appropriate. We have applied for BHCIP grants to build out additional adult and youth crisis continuum capacity.

We have not received a grant yet, and we are hoping that round five will bring us some more funding because we've identified some real needs in our community to build out this safety net. Thank you for affording me the time. I'm happy to answer any questions you have, and appreciate being here today.

Thank you, Director. And then now we'll move on to Nevada Director Bell. Nevada County.

Good morning, Madam Chair and Members. My name is Phebe Bell. I'm the Behavioral Health Director for Nevada County and Past President of CBHDA, and I appreciate the opportunity to discuss the state of behavioral health crisis care in rural California. Consistent with national statistics, rural counties, particularly those in Northern California like mine, have the highest suicide rates in the state, as those who are most at risk for suicide are older white men with ready access to firearms.

It's important to note that the relationship between mental health and suicide is complex, as more than half of those who die by suicide have no diagnosed mental health condition. I also want to add a bit of personal context to this conversation. I began my career working in suicide prevention, running a suicide hotline in the State of Nevada, and this added a level of irony as well as pain for me when I then lost my father to suicide.

I care deeply about this work, and like other county directors, I'm extremely passionate about making sure our crisis system is as effective as it possibly can be. Lives literally hang in the balance. To this end, Nevada County has been actively working over the last several years to build out our crisis care continuum to both prevent and respond to crisis and risk of death by suicide. Partnerships have been key for us.

For example, we embed county clinicians in our local emergency departments to provide assessments and treatment, as well as find inpatient beds for individuals needing further treatment. We've invested in a five-bed peer respite program for people on the edge of a crisis state, which is always full, and we operate a crisis stabilization unit as well, even though it's not a fiscally viable model in a small county.

My county has invested heavily in expanding access to outpatient services, which credit for the relatively low levels at which our clients require long-term inpatient care. However, we know that being homeless is bad for your health, and based on our data, we can see that our unhoused clients are significantly overrepresented in our crisis system.

Despite our efforts focused on housing, achieving and maintaining stability for our clients has been extremely difficult as the insufficient housing stock drives up costs and drives down vacancy rates, all of which was exacerbated by the migration to the mountains during the pandemic. We've been laser-focused on housing. Last year we built out housing infrastructure with the help of BHCIP, No Place Like Home, CCE, and many other grant opportunities which we've been aggressively pursuing and for which we're very grateful for the state support.

We successfully added 72 new beds of housing for our clients in a single year, and in that same year, 200 more individuals became homeless in our county. We are lucky as a smaller county to already have some mobile crisis services in place, though it has primarily been in the form of a correspondent mobile crisis team through our partnership with our sheriff.

We were awarded a CCMU grant through BHCIP to build out additional capacity, and we've been a part of the state CMS mobile crisis planning grant process. We're hopeful about the opportunity to build out a more comprehensive mobile crisis services model under the Medi-Cal Benefit, including our capacity to respond without law enforcement. I've taken a personal interest in figuring out how rural communities like mine fit into the national vision for a comprehensive crisis continuum.

My county participate with national experts in the Crisis Now Incubator Project, and I've been proud to represent rural California and various state and national tables, including the SAMHSA 911 988 Policy Academy last year. And I do want to highlight some concerns we see with how 988 is rolling out in California, given how important it is to the crisis system vision. Rural or small communities like mine currently feel disconnected from 988, and in our case, we have been quite literally disconnected.

In February of this year, our county learned that the 988 call center that had been serving our community, as well as numerous other counties, had abruptly closed its doors with no notice. Prior to its closure, we didn't have much of a relationship with the call center beyond providing financial support for their operations. In small communities, connectivity to community is particularly important.

We often know each other by name, whether client or provider run into each other at the market, share commiserations about the weather, storms, or fires. Distrust of faraway places and big urban providers runs high. It's hard to imagine how 988 can be a true hub for a crisis care continuum when a single call center is expected to serve more than a dozen rural counties covering almost half the state geographically. This model runs counter to how support works most effectively in our communities.

Given this reality, my county and others are interested in leveraging our county access line infrastructure and the continuum of local crisis care, much like Kern County has, and are interested in applying to be a 988 call center, although the process for applying through Vibrant has been confusing at best.

If 988 is intended to be the entry point door crisis system, we'll need to ensure a better pathway forward for either closer connections between the 12 crisis lines that serve California today or other more local solutions to meet the diverse needs of our community crisis continuums of care, and I'm happy to answer any questions.

Thank you so much. I appreciate, Directors, for your input. A couple of questions that came to mind: let me start off with the last point that was brought up and I don't know if the departments have any input on if you received feedback on rural communities having some extra difficulties with implementation of 988.

So I can pass.

So, as we mentioned, our BCP is moving forward. We're talking about it to start what is going to be a nearly two-year planning process to roll out the vision of AB 988. Certainly, want to take into consideration during that process the needs of rural communities. It recently came to our attention that counties, whether they be small or large, are interested in also becoming designated as 988 call centers. So we really want to start having those conversations.

That designation is something that is granted through an organization that's contracted with the Substance Abuse and Mental Health Services Administration, our kind of national counterpart to a lot of the role that DHCs plays. And so this is new territory, and other states are grappling with the same issue where they may have already had national suicide prevention hotline centers. Those centers then became 988 call centers when the three-digit number was involved.

But now with this larger vision to really make sure that individuals can get connected, regardless of payer, to appropriate crisis services adds a layer of complexity as to how do we design that system. And as Director Bell has pointed out, and also all three, you've got a large, medium, and small county that we're presenting. They and their communities need to design what's going to make sense for them. And the state totally respects that.

In our crisis care continuum plan that should be released any day now, we really lift that up and recognize that not only do there need to be deep local planning process, but we at the state level need to determine some governance structures. For example, this was a system that was held, and the responsibility was with SAMHSA. But now that we're trying to build out more connections, we really need to think about what works for California.

And so that is an issue that we will deliberate in as part of the policy Advisory Committee process that we're obligated to do and are excited to launch this summer once we get through the budget process, very open to working very collaboratively with the counties. And I don't know if you guys have anything else you want to add.

Perfect. No, that was great. Thank you so much for the insight, Dr. Kuwahara. That was a perfect segue into what makes sense for each county. Can you speak and you clarify? I know you said that you have a crisis response team that works collaboratively with your LEOs, your law enforcement officers. And now with this extra support here, are you going to have two separate teams that are going to be responding? So that's a yes.

Well, if I may, we're going to have to navigate this very carefully. So we already have. Our community is used to accessing mobile crisis response in a particular way. We will be shifting what we're doing. We have to prioritize 988 calls and where there are real mental health needs during a transition until people get used to really going to 988 and requesting that where needed and where I have someone available.

We want to continue to partner and work with our law enforcement partners because while the community is learning where to go for these resources, we don't want to leave anybody out. Our 988 calls will be prioritized. We'll have to make sure those are addressed, but we want to also support law enforcement.

You mentioned you have a clinician. Was it in your call center?

Yeah, working right along. No, not our call center. The 911 dispatch center. We now have two clinicians. They've asked to have more because they would like to see actual 24/7 coverage. They've found this to be incredibly helpful. The staff working alongside the dispatchers can do a lot over the phone that really supports the dispatchers and the officers.

And actually, a significant percentage of the calls that get transferred to my person working in the dispatch center is able to address the needs of the caller without requiring law enforcement to dispatch on scene.

And as your county has that response approach with your LEOs still moving forward with that just transition, I understand that. Do they have additional training? Do they get additional training?

I'm sorry? Do my staff or do the law enforcement?

Law enforcement, yes.

No, we have a very robust training program for all new. The dispatchers or the law enforcement?

Yeah, the responding officers.

Oh, yes. No. Many times a year, we're doing 40 hours a week mental health CIT training to orient them to behavioral health issues, how to recognize it, how to respond. This is offered to all incoming officers as part of their training, and then we're setting up resources for them to go through kind of a recertification process after a period of time.

Thank you. Thank you so much, Director. Dr. Wong, question, do we have a clinician in our response? I'm just trying to see how. I visited a mobile crisis team in the City of LA and they talked to me about how the 988 call center was embedded at the metro station and in downtown LA, and it was filtered out, connected from the 911 dispatcher to then the 988 call center. Is that the approach that's working well for LA County?

I think it's working well for LA County now, but we're still really trying to evolve the system. Of course, you probably know just as well as anybody, one of the challenges for us in LA County is just sort of size, right, to be able to scale up to the volume of need that we have.

So we don't have any clinicians, for instance, embedded in 911, but we do do the training for all the dispatchers, and we have a lot of law enforcement teams who continuously do training with them.

Perfect. Yeah. I wouldn't ask to put a clinician, ideally, but I know we're dealing with a huge vacancy rate in Department of Mental Health, so trying to help you out in the workforce shortage aspect there. And then can you speak on the youth capacity of how we're responding to the youth needs? Well, everyone, I'd love to, if all the directors could speak on the capacity and responding to our youth given just the extreme rates of mental health illnesses we're seeing in our youth.

One of the things that we're doing in LA County is we have seriously increased the number of our youth beds that are coming online. So we've always had a very limited number of acute and subacute facilities that could care for youth. So we're increasing that. And this includes our crisis stabilization units, crisis residential. But aside from that, we're also investing a lot in community youth interventions.

So different tape drop-in centers, things like that, so that we can reach people before it gets to the state of crisis, right? And we also are really ramping up a lot of our school initiatives, too, including launching a telehealth platform embedded in our schools so that youth can have access when they need it, where they want to do it, and it doesn't have to be, you make an office appointment and come in. But if you're comfortable doing it by video, you'll do it that way.

Or if you want to just do it by phone, you do it that way. We really want to increase all the points of access for our youth.

If I could add on to that, in Nevada County, we have a specific youth mobile crisis worker who responds to schools and community partner settings. If there's a youth having a crisis and it's a grant-funded position, that's the challenge of it. The good news is we know it's extremely effective.

It's much less invasive and traumatic to a young person to be able to go into a small room with a therapist and have a conversation about how they're doing, rather than have law enforcement show up and say, we hear there's a crisis, can we take you to the hospital or other mechanisms that currently exist.

The challenge is how do you take that to scale, given the low volume of calls, it's life-saving when it works and when it's needed. But if you're going to only have a few calls a week, how do you make that go financially? And so as we look at sort of the new mobile crisis infrastructure opportunity under kind of the Medi-Cal benefit, we're trying to figure out how to keep a youth-specific component in the mix.

Thank you.

If I may, for Kern, our mobile crisis response is engaging whoever is calling, but we are seeing increased needs for our youth. I think this really speaks to the need across the whole continuum. And ironically, much like what Lisa said, we are really focusing on how do we support them before they go into crisis. We're working closely with schools.

We're really trying to robustly build out access and services because we don't want to see them go into crisis. And trying to bookend on either side what happens before the crisis and then really shoring up what happens after crisis. The BHCIP grants are really important because we physically don't have infrastructure to meet some of our youth needs right now. And we are really hoping to find more resources because I desperately need to build a bigger facility for our youth CSU beds.

When we can't serve them here in Kern, they go into the EDs and that's not the environment we would want to see them in.

Agreed. Thank you so much, directors. I'd like to now give an opportunity to LAO for any comment that they see.

Will Owens, LAO. We have no comments but are available for questions.

Iliana Ramos, Department of Finance. Available for questions.

None. Quickly, the Administration, anything that stood out that you wanted to speak to?

I'm just incredibly looking forward to working with all the counties and putting together our state plan.

Perfect. Thank you so much, directors, again for your input and participation in this panel. We'll now move on to the last portion of this panel. Now we heard from the Administration, the counties, and now we're going to turn to our providers. I'd like to welcome them from Zoom as well. Joining us are two providers today we have Didi Hirsch Mental Health Services being represented by Lyn Morris, who is the CEO, and then also Joe Zamora, who is the CFO of Riverside University Health System. Welcome.

Thank you.

We'll start with Lyn.

Thank you. So good morning, Madam Chair and Members of the Committee. My name is Lyn Morris, CEO of Didi Hirsch Mental Health Services in Los Angeles. Didi Hirsch is a home to the nation's first and largest suicide prevention center and was selected by the Department of Healthcare Services to take the lead role in the state's 988 implementation efforts working in partnership with the 11 other California 988 crisis centers

The 988 suicide and crisis lifeline is not a new service crisis centers have been providing this life-saving service for decades. What is new is the number now, an easy-to-remember three-digit number that offers 24/7 call, chat, and text services for individuals in mental health, substance use, and suicidal crisis, or for loved ones who are concerned about somebody at risk.

988 crisis lines are the first key component of this crisis care continuum. SAMHSA leadership consistently commends the performance of California with its rollout of 988 and points to the work in the state as a shining example of 988 implementation in the nation. California 988 crisis centers are in the top five of over 200 centers in the 988 nationwide network in regards to having the highest percent of answered calls, chats, and texts,

On average, California's 988 crisis centers respond to more contacts than any other state per month, responding to over 260,000 calls, chats, and texts annually.

All 988 crisis centers are aligned with Lifeline's evaluated best practices, including the suicide safety policy that requires all centers to practice active engagement with the goal, to establish rapport and collaborate with individuals, to secure their own safety utilizing the least invasive intervention, and using involuntary emergency intervention only as a last resort. California 988 centers do an outstanding job at achieving this goal. To put this in perspective, just how effective 988 is, one only needs to look at the data.

96% of all calls and chats and texts received by the 988 crisis centers are resolved by crisis counselors and do not require further intervention. I cannot emphasize that enough that when you walk away from today's hearing about 988, I hope you hear this and remember this one statistic. 96% of all calls, chats, and texts we receive do not require an in-person response. This speaks to the expertise of all of our crisis centers due to their extensive training.

And as a licensed clinician myself, I can tell you that the intensive and ongoing crisis intervention training our 988 crisis counselors receive is far more than most licensed therapists. However, in the small percentage of calls where an intervention is needed for high-risk individuals, crisis counselors are very skilled in assessing and sending the most appropriate in-person response when needed. So since launching 988 in July of 2022, our total in-state contacts answered have increased by 22%.

The level of acuity of our calls has not changed significantly. Young people under 24 accounted for nearly 40% of total contacts, and individuals reaching out about someone they were concerned about increased over 150%. Help seekers were 54% female, 43% male, and 3% transgender, nonbinary, or other gender. 58% of our contacts came from Black, Indigenous, and people of color, as well as those identifying with multiple races. The 12 California crisis centers are working to make 988 a trusted resource for all Californians.

Currently, if you press one, you can press one for veterans, press two for Spanish speaking, and there's press three for LGBTQ plus help seekers. Additionally, Didi Hirsch recently convened two statewide 988 tribal summits in collaboration with Assembly Member Ramos to address specific cultural considerations to make 988 a trusted resource for California's native communities. Without question, 988 is saving lives.

Recently, a 20-year-old Black female called 988 and at the end of her call reported, I feel better after talking to you about my suicidal thoughts, and I do want to look up the support group that you referred me to. It was very relieving to know I can call 988 and that the cops and the whole shebang doesn't need to happen just because I admitted to feeling suicidal. This has weighted on me for a while.

What helped most was a human-to-human connection, feeling heard and not being alone. Thank you. However, there is some confusion still with 988, as well as the scope of services provided. So what we're hearing is that 988 is currently referenced in two ways. One, to describe the 988 suicidal crisis lifeline, and by others to describe the entire crisis care continuum, along with the assumption that all the service components are in place.

I believe this is the result of a simple misunderstanding between the vision of the full continuum of crisis services, whereby 988 crisis lines are the first component, versus where we are today at the beginning of the process of building out and filling in the gaps within the crisis care continuum, which will take many years.

It's important to remember the vision of 988, which includes someone to call the 988 crisis center, someone to respond, which includes our mobile crisis response teams, and a place to go, which includes crisis receiving and stabilization facilities. And I love that Lisa also mentioned a place to treat. The 90-day crisis centers and the Administration have focused its first year building out the infrastructure and operational capacity. We know the volume to 988 crisis lines will only increase.

Therefore, it's critical that we ensure that there is sustainable, predictable funding stream in place, because as the demand for 988 increases, this life-saving resource will become more recognized in the coming years. Currently, our crisis lines are operating at just over $3 million a month, and we know this will double very easily in the coming years. And we're not at full capacity yet either. We are pleased to see California embracing the national model of best practices outlined by SAMHSA for its crisis continuum.

The 988 crisis centers look forward to supporting CalHHS as they begin to engage stakeholders in their robust planning process. I want to thank all of the incredible 988 California crisis centers for their tireless work saving lives and their commitment to making the 988 network in California a gold standard in the nation.

On behalf of all the 988 crisis centers, we also wish to express our gratitude to our state partners, Department of Healthcare Services, California Health and Human Services, and California Office of Emergency Services, for their ongoing support and collaboration, as well as Assembly Member Rebecca Bauer-Kahan, the principal author of AB 988. Thank you, Chair and Committee Members. I'm happy to answer any questions you may have.

Thank you so much. Go ahead, Joe.

Thank you. Good morning, and thank you, Madam Chair and Committee Members, for the opportunity to speak today about our health system and its behavioral health care continuum. My name is Joe Zamora, Chief Financial Officer for Riverside University Health System. RUHS is Riverside County's public safety net healthcare system comprised of a 439-bed level one trauma center, 14 federally qualified community health centers, and the behavioral health and public health departments.

RUHS offers a comprehensive range of behavioral health services for individuals experiencing a behavioral health crisis, including crisis stabilization, mobile crisis response teams, psychiatric emergency services, and inpatient psychiatric services.

In addition to serving individuals in crisis, RUHS over the last five years has expanded care delivery in several key areas in an attempt to meet the patient wherever their needs present and provide the right care in the right place at the right time.

What that means within RUHS is a focus on building out the care continuum and filling care gaps by opening and expanding seven new federally qualified community health center sites with an additional 200,000 clinic space, allowing for the expansion of primary care, but more specifically adding behavioral health, LMFT, LCSW, and psychiatry services to the clinics.

Utilizing state grants, infrastructure, and MHSA funding, RUHS built out 349 additional beds within the continuum, including a 92-bed augmented boarding care, a 59-bed mental health rehabilitation center, an eight-bed person under investigation unit, 20 additional acute psych inpatient beds, 116 housing unit for adults and seniors with serious mental illness, and a 54-bed sobering center. Despite these recent investments in the care continuum, the unmet need for Riverside County's medical population alone is more than five times greater than our current patient population served.

Projected population growth will continue to further strain already stretched safety net services. On any given day in our acute inpatient hospital, we have at least 30 patients awaiting a lower-level bed placement. This bed blockage leads to strains in other community hospital beds and emergency rooms, but is also what drives our future plans for use of resource and infrastructure grants and any other funding we can apply for and get our hands on.

These plans include replacing the current 30-plus-year-old, 77-bed acute psych inpatient hospital and expand it to a minimum of 100 beds at a new location. Once the new acute psychiatric inpatient hospital is built, the existing location will be repurposed and rehabilitated into a 77-plus-bed Institute for mental disease facility. We're working on building five recovery villages spread regionally across the county.

Each will have their own care continuum on site, stepping down from mental health rehabilitation centers, the highest level onsite care, to intensive outpatient support. Each recovery village will add four to 500 beds within various levels of the care continuum. We're also working on a total of 312 no-place-like home beds that will be added for individuals with serious mental illness, of which 71 beds will be dedicated to seniors with SMI.

These are just a few of our big capital projects we are working on to address the lack of beds at all levels of the behavioral health care continuum. RUHS would welcome the state to provide additional funding and work closely with counties and providers like public health care systems to expand treatment beds and housing options for individuals in treatment.

We are also working closer than ever with our local health plans and other county social service departments to further promote integration and coordination of care across different systems and settings, including medical, behavioral health, and social services. RUHS feels this is critical to begin to address social determinants of health such as housing instability, food insecurity, and poverty. Addressing these underlying social factors can improve overall health outcomes and reduce the need for behavioral health services.

I hope that gives you some insight into our system's continuum efforts from prevention to the most acute settings. I believe our efforts align well with many of the state's recent initiatives, and that alignment is partly why we've been able to accomplish so much. I also recognize that each community's needs can be somewhat unique and why funding flexibility at local level is needed.

Just want to thank again for the state for the recent initiatives, the investment supports, and thank you for your time, and we'd be happy to answer any questions you may have.

Thank you so much. LAO, any comment on this?

Will Owens, LAO. No comments, but available for questions.

Iliana Ramos, Department of Finance. No comments.

Thank you so much. Just few, just two questions. Lyn, 96% don't require an in-person response, which is great. What about the follow-up? How do we know that that touch was enough? Do we have any follow-up with those individuals?

Yes, at times. And I think that's a part of the crisis care continuum that we can strengthen. I know at most crisis centers we do follow-up once somebody is requiring an in-person response.

Sometimes we get an answer and sometimes not, depending how busy either the hospital or other organization is. We also will offer follow-up calls. 988 crisis centers will offer follow-up calls to callers as well, who are at high risk for a period of time afterwards as well. So we do try to stay connected as much as possible and make sure that they are getting the service that they need.

And what's the connection between your crisis center and, correct me if I'm misunderstanding here, your crisis center and then the 988 hotline call center?

It's the same thing. So Didi Hirsch is one of the 12 988 California crisis centers, and we lead the others and partner with them in all that we do for 988 implementation. So there are 12 total California 98 centers. Didi Hirsch is one. Kern County, as you heard, is one. And there are several others throughout the state.

And then for LA County specifically, with the calls being rerouted from 911 to 988, are you seeing that some calls are falling through the gaps?

No, actually, we're seeing a lot of positive outcomes coming from our 911 diversion program. So LAPD will route calls who are not an immediate crisis, imminent crisis, or where there's a safety concern, they will transfer those calls to our crisis line, 988, and then we handle those callers.

And what we're seeing is that we're reaching more Black and brown, young males in particular, through that resource and getting them a more appropriate level of care and response. And what we're seeing is that we're able to deescalate most of those calls coming in and not then have to send law enforcement out for an in-person response. So it's been very successful so far.

Thank you so much. Joe. Question on the beds expansion. You know, doing some good work there. What does your workforce capacity look like to be able to run these facilities in these beds?

I think that's an area of concern, right? I think we partner with numerous local universities to try to, we've expanded our residency programs to try to create a broader training program. We are investing in workforce development, but definitely a concern. I think the Inland Empire in general and Riverside has had a shortage of healthcare professionals as a lot of parts of the state. So it's definitely a concern, definitely an area of focus, and definitely an area we're investing in.

It's one of the concerns that we have about some of the new projects we have that we're bringing online, the ability to recruit qualified staff to provide the care. And I think it's something that factors into our decisions as to where we're trying to locate some of these sites in the cities that we're partnering with as well.

And question regarding veterans, a lot of veterans in the IE, what does collaboration look like for mental health with our veterans there?

I can speak briefly to, you know, the county also has a Veterans Department that we work closely with. Our board of supervisors has expressed the utmost support of our veterans and has really made it clear that our veterans will receive access to care despite any ability to pay. And so we work closely with our Veterans Department, our other county Executive office, trying to coordinate those efforts and make sure that we don't have a wrong door. So we will take referrals from any source, from a veteran.

Sorry to cut you off, I guess. Specifically, I was asking now that it's opened the doors for veterans who are seeking mental health to go to the no-wrong door. So I wanted to see what collaboration was looking like and perhaps sending the veterans back to the VA health system and the increased capacity now that veterans can go to any service provider for these services.

Correct. I don't know if I answered your question, but we are trying to expand services across all age spectrums and demographics, and that includes veterans. And then we have some veteran-specific programs within the county as well, and some peer support programs for veterans. I can certainly get you some more information on our veteran programs and service offerings, if that would be helpful.

That would. Thank you so much. Those were my only questions. Easy day for you all with no Subcommittee Members here. So I want to thank y'all. We're going to close out this panel. I thank the Administration, the county directors, and the providers for coming and joining me here today. Thank you so much.

Thank you, Madam Chair.

We'll move on to other budget proposals from the Department of Healthcare Services, and we'll begin now with issue one on CalAIM behavioral health payment reform.

Good afternoon. Jacey Cooper, State Medicaid Director and Chief Deputy at the Department of Health Care Services. The Department is working to implement behavioral health payment reform effective July 1, 2023, so coming up soon. There are three main pieces tied to payment reform when it comes to counties for behavioral health. The first is transitioning to a more detailed coding set to get additional information details in regards to the types of services that are being provided, as well as who's providing those services.

It also includes receiving reimbursement through a fee schedule, whereas previously it was a cost-based reimbursement methodology and then moving to intergovernmental transfers instead of the CPT protocol or it was called Certified Public Expenditure Protocol. We see a number of significant benefits for our county partners in regards to payment reform, specifically reducing their administrative burden, as well as that additional data that will really help us understand utilization trends and quality in the future.

The Department has provided extensive training regarding the changes of codes in various conversations in partnership with our county partners on payment reform. As the state transitions, though to IGT reimbursement methodologies, there will be a number of final audits on their cost reports that will have many counties will have to retain funds in order to reconcile with the State of California, and this can take some time. That can create cash flow problems for our county partners.

Additionally, the new requirements with IGT means that the funds have to be paid in advance. So what we are putting forward for consideration is, to address those cash flow concerns, is in the budget the Department is requesting 375 million General Fund in one time to use the nonfederal share in lieu of those IGTs for the first 90 days of payments so the counties can successfully transition to this new payment reform. And happy to answer any questions that you may have.

LAO, any comment on this PCP?

Yeah, Will Owens LAO. No, we just want to note that we find the governor's proposal reasonable and that we generally find it reasonable in order to ensure the successful transition. Without the funding, we find that counties probably would face significant cash flow problems. And so with that, happy to answer any questions.

Thank you.

Iliana Ramos, Department of Finance. I would just like to echo what the other two panelists said. We think this is a very important part of CaAIM to ensure success.

Thank you so much. No comment or question on my end. We're going to hold the item open and move on.

Issue number two as relates to SB 929.

Thank you.

Senate Bill 929, passed last year, increases the requirements for data collection related to involuntary holds and treatment under the Lanternman Petris Short Act or the LPS Act. Senate Bill 929 is an important step to better-identifying trends and characteristics of involuntary holds, evaluations, and admissions under the LPS Act. This new data can be used to help improve interventions and service outcomes. In the budget change proposal, the Department is requesting 10 permanent positions to implement the requirements of the Bill.

In order to implement SB 929, the Department would be responsible with hiring and training staff to provide oversight of LPS Act requirements, build and implement a new data system, and manage and interpret the data collected from counties and from designated facilities. These requested resources are needed for the Department to be adequately resourced to effectively focus on collecting the required data and conduct the required postings in a timely manner in accordance with statutory requirements.

Information technology, permanent positions, and contract resources are necessary as they have the expertise in data mining to identify and provide appropriate data to meet the bill's requirements. In the proposed trailer Bill Language, the Department seeks to clarify the roles and the responsibilities for data reporting between the state, the counties, and the providers in the implementation of the LPS act. Specifically, the Department does not have oversight authority over all entities and individuals that initiate LPS holds and provide LPS Act evaluations, admissions, and treatments.

So the trailer Bill would clarify that data should flow from designated facilities and other entities to the counties who are responsible for administering the LPS Act under state law and who designate facilities and entities to initiate involuntary holds. Then the counties would report the data to the Department. The Department recognizes counties may have concerns about assuming responsibility for data collection.

We believe it's appropriate to move in this direction because under law, counties, rather than the Department, have direct relationships with the entities that they choose to designate to participate in LPS Act activities. This would also allow counties to review data initially, improve data integrity, and address issues at the local level. Second and finally, the trailer Bill would also provide the Department the ability to impose civil monetary penalties against LPS-designated facilities and counties for failure to submit data timely.

Without this added language on penalties, the Department would not be able to successfully enforce compliance with the bill's requirements. Happy to answer any questions.

Thank you. LAO, any comments?

Yes, so we haven't released analysis of this proposal, but we do understand, particularly with the trailer Bill, that it raises some policy questions for the Legislature to consider. And so at this time, we're happy to answer any questions.

You said you haven't released an analysis, correct?

That's correct.

Okay. When do you anticipate that coming out?

Happy to work with staff to kind of work through some of those issues as well.

Thank you so much. Department of Finance.

No additional comments.

Thank you. We're going to hold the item open and move on to issue number three.

Good morning. Afternoon, I think now. I'm Lori Walker. I'm the Department of Health Care Services Chief Financial Officer. So, issue three. The Department is requesting two permanent positions to implement the requirements of AB 2242. AB 2242 requires the Department to convene a stakeholder group on or before December 1, 2023 to create a model care coordination plan for the coordination of care for individuals held under a temporary holder conservatorship. The first meeting occurred on March 30, 2023 with another one scheduled June 1.

The extensive nature of the bill's model care coordination plan implementation involves consultation with various stakeholders, oversight activities to ensure successful implementation, and regulation analysis and development. The Department will need the additional resources to provide technical assistance and oversight to ensure counties and statewide lps designated and approved facilities successfully implement the provisions as stipulated.

Thank you.

Yes, we have no concerns with this proposal.

Department of Finance. No additional comments.

Great. Thank you so much. We're going to hold the item open and move on to issue number four as it relates to AB 1051.

Thank you. I'll do that one, too. The Department is requesting five permanent positions and budget year ongoing. These resources are needed to implement and maintain the new workload resulting from AB 1051.

1051 requires the Department and the California Department of Social Services to collect data on the receipt of specialty mental health services for foster children who are placed outside of their county of original jurisdiction and requires the data to be included in the Medi-Cal specialty mental health services performance dashboard.

These resources will assist foster children placed in group home community treatment facilities, children's crisis residential programs, and short term residential therapeutic programs outside of their county of original jurisdiction to be able to access specialty mental health services in a timely manner, consistent with their individual strengths and needs, and with early and periodic screening, diagnosis and treatment, and specialty mental health services requirements. Happy to address questions.

Just to confirm, not just for data collection, right?

That is correct. Sorry, that's correct. There's one position requested for data collection specifically, and there are four positions requested for program and policy implementation.

Perfect. Thank you. LAO, any comment?

We have no concerns with this proposal.

For Department of Finance, we have no additional comments.

Thank you so much. Hold the item open. Move on to issue number five as it relates to AB 2317.

Assembly Bill 2317 was passed last year, and it establishes psychiatric residential treatment facilities as a new category of health facilities that would be licensed by the Department. A psychiatric health facility is defined as a licensed health facility operated by a public agency or private organization with a provider agreement with a state Medicaid agency that provides inpatient psychiatric services to individuals under 21 years of age in a no-nhospital setting.

The bill requires the Department, in collaboration with stakeholders, to establish regulations and certifications consistent with federal Medicare and Medicaid regulations to maximize federal financial participation. Through the proposal, the Department requests 15 permanent physicians, expenditure authority of $2.6 million in budget year to establish and oversee this new facility type. The resources will assist with promulgating and developing regulations, policies and processes related to licensure, onsite review operations, clinical practice standards, and legal consultation.

In addition, the proposed trailer bill is meant to clean up statute governing psychiatric residential treatment facilities with the purpose of aligning with federal law and making other technical changes. Specifically, the current language is in conflict with federal requirements, and it puts the Department at risk of losing federal Medicaid funding due to non compliance with federal requirements. So in the trailer bill, the Department proposes to align with CMS regulations specifically related to the composition and the credentials of interdisciplinary team members.

Although there is no budget impact to this trailer bill, the Department intends to propose this technical cleanup language. Through trailer bill, the Department provided a walkthrough of the language with legislative leadership, both human and health services staff, as well as a walkthrough with Assembly Member Ramos's staff. Happy to answer details about the proposed change.

Thank you. LAO?

No concerns.

Department of Finance, also no additional comments.

I just want to know given what SAC B came out with that article and youth and our foster youth complex needs in our juvenile halls, I'm excited about this being implemented and in the oversight, I hope that we're able to provide capacity for those youth to get services in these facilities. We're going to hold the item open. Move on to issue number six.

Issue number six deals with strengthening oversight for substance use disorder licensing and certification. While the Department has made strides to improve licensing and certification oversight, the Department proposes a budget change proposal and trailer bill to strengthen our oversight capabilities for substance use disorder facilities. With this proposal, the Department seeks to implement a fee increase, effective July 1, 2023 for fees associated with the residential and outpatient program licensing fund.

The proposal would make statutory changes to improve the fee setting process, and it would also establish a new requirement for mandatory certification of outpatient substance use disorder facilities. Today, there's no requirement that they be licensed or certified. The proposal would increase the expenditure authority for the Department. It would implement mandatory certification, and it would specifically support the Department to increase resources in Southern California, which experiences the highest rate of resource intensive investigations, complaints, and deficiencies within these facilities.

Upon approval of the proposed fee increase, the Department requests 12 permanent positions to strengthen compliance oversight, including the new mandatory certification for outpatient programs. Without a fee increase, the fund would not be able to support additional oversight requirements as it is currently insufficient for existing licensing and certification obligations. Just as context, the fees were last increased in 2014, and in the past several years. Since then, new legislation has passed that expands the department's responsibility for licensing and certification.

This includes implementing patient brokering laws that prohibit payment for individuals referring patients to providers. It requires the Department to implement a level of care designation program for every single residential provider consistent with the American Society of Addiction Medicine and other laws related to insurance policies for each providers. So, at the same time, legislation has expanded the functions and the scope of licensure requirements. The fund has simultaneously experienced a steady decline in revenue due to the pandemic and program closures.

So what this means is that the fund is insufficient to sustain existing staff resources. In January 2022, the Department requested to increase fees that fund the residential and outpatient program licensing fund by 63%. However, in July 2022, instead of a fee increase, the Budget Act included one-time General Fund to support licensing and certification workload. So the Department recognizes that a fee increase of any amount could have an impact on the provider field.

But specifically, how much a 75% fee increase would impact the field is unknown as we do not collect information regarding gross revenue or operating margins from individual providers. However, we just wanted to provide an example to the Legislature of how much the proposed fee increase actually is, if that's helpful. Specifically, an existing certified outpatient provider would face an increase of $2,849, which would be assessed every other year.

So this averages out to an increase about $1,400 in annual costs. For a residential provider with 50 beds, the proposed increase would come out to $12,150, which again is assessed every other year, averaging out to an increase of about $6,000 per year. We sort of estimated the impact that this increase would have on a provider that participates in Medi-Cal exclusively and chooses not to admit patients with any other sources of health coverage.

So a residential provider with 50 beds that only provides care to Medi-Cal members would generate approximately $5.6 million in claims annually at the average county rate, with assuming a low occupancy rate of 80%. Of course, we know residential providers generally have a higher occupancy rate, so this is a conservative estimate.

And this example of a provider generating $5.6 million in claims and facing an increase of $6,000 is for a provider that only participates in Medi-Cal. Providers that deliver care to members with individuals with other sources of health coverage likely receive higher reimbursement rates and generate more revenue. So just wanted to provide that example if it was helpful.

We're committed to working with the provider community and with the Legislature to ensure Californians are able to access substance use disorder treatment services while the Department receives the funding to implement legislatively mandated licensure and oversight functions.

Thank you. LAO, any comment?

We have not raised concerns with this proposal.

For the Department of Finance, no additional comments.

Department of Finance, my first question to you. In the 2022 Budget act, this fee increase wasn't authorized. Instead, money came out of the General Fund to cover this. Have we looked at moving forward with just including this in the General Fund to cover the licensing and oversight?

Yes, acknowledging that the Administration proposed a similar fee increase in the last budget cycle. However, in order to allow for additional time to discuss potential alternatives, we included with the Legislature a one-time General Fund augmentation as a temporary basis. However, the Administration continues to believe that this fee funded program is better suited to be supported and continued to be supported by the fees.

Okay, thank you. The reason why I ask I share some of the same concerns as my predecessors in the 2022 Legislature. I get that perhaps 6,000, 1,000 something isn't a lot, but when you're not getting a lot of Medi-Cal reimbursement to treat these individuals, that is a lot. $1,000, that's another one, two individuals you can help per year. So I do share some similar concerns. I do want to see if we can find another way to fund this oversight and licensing portion of it. And can you just clarify for me? You said a Medi-Cal only facility who makes $5.6 million annually?

So this is just a hypothetical example. It really depends on the county they're located in. It depends on the level of care designation that they're operating at. So the example was a residential provider with 50 beds operating at 80% occupancy that has an ACM level 3.5 designation at the average county rate under behavioral health payment reform. So it's just very one way to estimate it.

Right. Okay. I do share concerns. I'd like to see if somehow I recognize we're trying to balance the budget here. But if this is going to be an ongoing request to cover, perhaps we can find other avenues. But we'll hold the item open for right now and move on to issue number seven.

Thank you. For issue number seven, the Department is requesting four year limited term expenditure authority of $32 million for budget year, $23 million in FY 24-25, $12 million in FY 25-26 through 26-27. And this would to support the department's naloxone distribution project or the NDP. Requests for naloxone through the NDP have significantly increased over the last year.

This is largely due to the rising rates of overdoses, in particular due to increased presence of fentanyl, and now emerging trends of fentanyl cut with Xylazine, which increases the lethality. To date, the NDP has distributed over 2 million units of naloxone and has resulted in over 140,000 reported overdose reversals. In current year, the Department anticipates distributing over 1 million units of naloxone, costing approximately $59.5 million.

And due to the unprecedented demand and increase for naloxone, the Department expects to distribute over 1.8 million units of naloxone, costing approximately $88 million in budget year. So happy to provide more information about the opioid settlement funds or about this program.

Before, LAO, any comment?

No concerns.

Here to answer any questions.

I do have a question. Do we know how much we have in that fund right now? Either Department of Finance, maybe?

Yes. In the BCP itself, in the last page you will find a chart that includes all of the administration's proposed state directed uses for the portion that is going to be allocated to the Administration.

Is that the total fund we have? Are we going to clear out this fund after spending all of this?

Yeah, that includes a proposal to spend all the revenues that we're projected to get as of the '23 Governor's Budget.

And just to clarify, this breakdown is for the entire BCP here on issue seven?

This particular BCP is an augmentation to some of the funding that was included in the last budget cycle for expenditure as well.

Okay, and maybe my consultant can help me out. Are we going to see BCPs later if every single one of this breakdown?

There are additional proposals this cycle from the Department of Public Health as well.

The reason why I'm asking, I think last week or two weeks ago, we had a stakeholder proposal on harm reduction. Can't remember how much it was for. $61 million. It's a lot. But I'm wondering if proposals like that we can fund through this fund because it falls within, it seems to me it falls within the parameters of what this fund was created for.

We can certainly look into what proposals that Legislature is interested in.

Okay, thank you. No other questions. I'm going to hold the item open and move on to issue number eight.

In item number eight, the Department proposes to change the drug Medi-Cal claim timeliness from six months to 12 months to create parity and consistency across all of our claiming time periods. Happy to answer any questions that you may have.

Now pretty straightforward on this one. LAO, any comment?

No concerns.

Perfect. Department of Finance, any comment?

No additional comments. Thank you.

Perfect. Hold the item open. Move on to issue number nine.

Great. For number nine, the Department is submitting two items in this particular trailer. One is to effectuate updates to the CalAIM waiver approved language around designated state health programs, as well as to respond to concerns raised by stakeholders to increase the timing for the transition for our ICFDD and subacute partners. So I'll go over each of those quickly.

For the designated state health programs, as a part of the CalAIM waiver, we were authorized up to $646,000,000 of federal funds in order to cover the non federal share of the providing access and transforming health program or the PATH program.

These are the funds that are funding various enhanced care management and community support providers across the state of California to get started, as well as some of our justice dollars tied to infrastructure building. As a condition of getting that funding from the Federal Government, they also required that we evaluate our primary care, OB, and behavioral health rates in Medi-Cal, and any rates that were below 80% of Medicare to do an augmentation as negotiated with CMS.

Through those negotiations, we agreed to a 10% increase for primary care as well as OBGYN. This 10% increase would apply to any of the codes that are below the 80% and would be effective January 1 of 2024. In evaluating the codes that were defined as behavioral health, all were above based on the algorithm that we had, the 80% of Medicare, and therefore did not move forward with any augmentation on those particular codes. That's for the mild to moderate mental health services just to clarify.

The second item, the Department is proposing to delay the transition of the intermediate care facility, developmental disabled, and subacute care facilities in Medi-Cal into carving them into managed care from July 1, 2023 to January 1 of 2024. This was really based on stakeholder feedback that given the complexity of these transitions, we just need more time and we agree. So we continue to work with them on policy. We've been working very closely with our Department of Developmental Services and advocates on this, and we'd be happy to answer any questions you may have.

LAO, any comment?

No concerns.

Department of Finance?

Andrew Duffy, Department of Finance, nothing further.

I mean, when you see a sentence, increased Medi-Cal reimbursement rates, I mean, the potential--that's really exciting. We're going to hold that. No questions. Hold the item open. Move on to issue number 10.

Okay, issue number 10. The Department is requesting five permanent positions and expenditure authority of $1.4 million to meet the expanded workload created by Senate Bill 1019. The department's required to post the first triannnual report on consumer experience with managed care plan covered mental health benefits in April of 2026. The department's required to review managed care plan's annual outreach and education plans to members regarding covered mental health benefits and approve or modify each plan to verify standards are met. SB 1019 requires the Department once every three years to assess member experience with managed care plans and covered mental health benefits.

No concerns.

LAO?

Department of Finance, nothing further.

No questions on my end. Hold the item open. Move on to issue number 11.

The Department is requesting one time appropriation of $7.4 million to reimburse local education agencies for excess administrative withholds associated with the local education agency Medi-Cal billing option program. The Department administers the LEA Medical Billing Option Program, which is a school based federal reimbursement and certified public expenditure program providing qualified health services to enrolled students. The department's authorized for a combined 2% withhold through the Budget Act of 2010.

The Department's obligated to return any unused funds to the LEA as part of the original withhold, and the Department will proportionately return the funds to LEAs participating in the program that paid into the combined withhold. Happy to address questions.

My joke here is regarding what this is called. We're going to pop the money back. That's what I said. LAO, any comment?

Jason Constantouros, LAO, we haven't raised concerns with this proposal.

Okay, Department of Finance?

Iliana Ramos, Department of Finance. No additional comments.

Thank you so much. We're going to hold the item open and move on to issue number 12.

By way of background, there are situations where the Department could run out of budget authority, including if the budget isn't enacted on time or if there are unexpected major changes in operating conditions compared to budget act conditions, which could result in payments not being made to some Medi-Cal providers or managed care plans. State law provides for access to a temporary loan with approval from the Department of Finance to enable provider payments to continue until additional appropriation authority is obtained.

The limit on the loan is currently $2 billion from the General Fund and $2 billion in federal budget authority. However, this amount is insufficient based on the growth of Medi-Cal costs, particularly in managed care. The department's proposing to change the limit on the loan to a percentage of estimated Medi-Cal spending, allowing the limit to adjust to the size of the program.

The trailer bill proposes to set the interim payment loan amount to 10% of the amount appropriated for the General Fund and 6% of the amount appropriated from the Federal Trust Fund. Anchoring maximum interim loan payment amounts to a percentage will minimize the need to update the statutory limits in the future. Happy to address questions.

Where we work smarter, not harder, on this one. LAO, any comment?

No concerns.

Department of Finance. Nothing further to add.

On the spot, Senator, any question?

I'm just surprised we're on issue number 12.

We're going to hold the item open and move on to issue number 13. The panel went quick. It was just me asking questions.

You were missing the governor's office.

Okay. For issue 13, the department's requesting two permanent positions contract resources, total expenditure authority of $1.3 million to support workload for three new skilled nursing facility financing programs authorized by Assembly Bill 186, Workforce and Quality Incentive Program, which supersedes the former Quality and Accountability Supplemental Payment program, Workforce Standards Program, and Accountability sanctions program.

The new Skilled Nursing Facility Finance Reform programs are intended to better incentivize and hold facilities accountable for quality patient care, emphasize the critical role of workforce, and better balance distribution of annual rate increases, and result in the long term financial viability of the facilities in the Medi-Cal managed care environment. Happy to address questions.

LAO, any comment?

Luke Koushmaro with the LAO. We do not have any comments on this one. Thank you.

Department of Finance?

Andrew Duffy, Finance, nothing further.

All right, no question, comment on my end. We're going to hold the item open and move on to issue number 14.

Okay. This proposal request expenditure authority for 10 new permanent positions that are necessary for the Department to meet current workload demands necessary to comply with federal and state requirements related to the Administration, operation, and monitoring of the Program of All Inclusive Care for Elderly or PACE. The positions requested will allow the Department to establish a dedicated pace monitoring unit responsible for pace audits and quality monitoring functions.

Increase operational capacity to meet the continuously increasing volume of pace nursing facility level of care determinations, it must perform for every new participant evaluated for enrollment in PACE, as well as annually after enrollment. And the positions requested also include legal support for the program and its continued growth. Federal PACE regulations require the state administering agencies conduct on site audits of new PACE organizations annually during their first three years of operations.

DHCS also requests on site audits of mature pace organizations outside of their trial period, at least every three years or is appropriate to address program compliance. I'm happy to address questions.

No, I can see how this makes sense in my district. I just learned that two new PACE facilities are going to be opening up, so I'm really happy that this is a good situation to have increased workload in this. LAO, any comment?

We have not raised concerns with this.

Department of Finance?

Nothing further.

Great. Perfect. Hold the item open, move on to issue number 15.

Okay, the Department is requesting 16 permanent positions, five year limited term resources equivalent to five positions.

16 or 19?

16 permanent five year limited term resources equivalent to five positions and conversion of three LT resources to permanent, so 19 total, expenditure authority of $3.8 million. The Department is mindful of the projected budget challenges, but believes it's appropriate and important to resource our workload to facilitate being accountable to achieving our important policy and program objectives.

These resources are requested to address the following ongoing workload: Medi-Cal health enrollment navigators, strengthening preventive services for children in Medi-Cal, short term residential therapeutic program, mental health, program approval, oversight monitoring, and Administration resources in the Department. Happy to address questions.

Just to say sorry, LA is potentially dumping all their cases to you as well. LAO?

We have not raised concerns. Thank you.

Department of Finance.

No additional comments.

Great. Seeing nothing else, we're going to hold that item open and move on to issue number 16.

The Department is requesting two permanent positions expenditure authority of $523,000 in budget year to provide clinical and legal expertise in reviewing proposed state fair hearing decisions and assisting the Department Director or their designee in drafting alternative state fair hearing decisions.

The proposal will provide appropriate and adequate clinical and legal review of hearing recordings and transcripts, clinical expertise for proposed state fair hearing decisions, appropriate legal expertise for assistance with drafting alternative state fair hearing decisions, and resources to verify that the bill requirements are met and all appropriate references are cited. Happy to address questions.

LAO?

No concerns with this. Thank you.

Department of Finance?

Andrew Duffy, Department of Finance. Nothing further to add.

Great. Seeing nothing else, we're going to hold the item open and we're going to move on to issue number 17.

Each June, the Department withholds the last two weeks of fee for service payments or check rights and pays them at the beginning of July. This practice has been in place for a number of years since the shift was implemented to reduce state costs in a difficult budget year on a one time basis. The 2022 Budget Act included funding to buy back the current two week delay by moving the two weeks back to the end of June.

While we remain committed to the policy the pay provider is timely due to the state's projected General Fund revenue decline, the Department is proposing to delay the buyback of the check right hold until fiscal year 24-25. This action reduces costs by $1.1 billion total fund and $378,000,000 General Fund the current year. Happy to address questions.

In consideration of the state's current budget situation, we find this proposal reasonable.

Thank you. Nothing to add?

Nothing to add.

Thank you. Nothing else add. We're going to hold the item open and move on to issue number 18.

Great. The Department proposes to update and conform statutory requirements related to the Medi-Cal local assistance estimate with recent program changes in Medi-Cal and reorganize the estimate and Budget Act information to conform with how the estimates develop today. Our objectives to maintain transparency and accountability while enhancing usefulness and administrative efficiency. Specifically, this proposal would remove the requirement that fee for service rate increases be separately displayed. Fee for service rate increases are less central to the Medi-Cal program now due to increased use in managed care.

Consolidate all local assistance administrative costs, including County Administration for eligibility determinations, which is currently the largest components of local assistance administrative spending. Fiscal intermediate management. These are contractors the state uses to process fee for service payments and other local assistance Administration. This includes things where we have determined they are not benefits, their Administration in claiming to our federal partners. And budget under a single budget line item referred to as county or other local assistance administration in the Budget Act.

This proposal removes the requirement of the Department of Finance to produce a range of estimates of Medi-Cal spending to reflect current practice and removes the requirement for county by county administrative cost projections to reflect current practice. Happy to address questions.

We have not raised concerns with this proposal.

Nothing further.

Nothing further on our end either. Hold that item open. Move on to issue number 19.

The Department proposes to require all qualified Medi-Cal providers participating in presumptive eligibility programs to report the births of any Medi-Cal eligible infant born in their facility, including hospitals and birthing centers or other birthing settings, within 24 hours after birth through the Newborn Hospital Gateway, resulting in more expeditious eligibility activation into the Medi-Cal program.

The Children Health and Disability program will sunset June 30, 2024 and the CHTB Gateway, including the Newborn Hospital Gateway process, will transition and be renamed the Children's Presumptive Eligibility online portal, effective July 1 of 2024. I would note that we have heard from some hospitals that the 24 hours may be very soon, so we're having conversations with them in regards to alternatives and happy to continue to update people in regards to that. Happy to answer any questions.

So do you anticipate the TPL to be the date to be changed?

We're looking at what their request is. One of their requests is, for example, looking at 24 hours upon discharge or 72 hours within from birth. That came in from Los Angeles recently. So we're looking at their requests and we'll continue to have conversations with them.

Thank you. LAO, any comment?

We have not raised concerns.

Nothing further.

Nothing further on our end, we're going to hold the item open and move on to issue number 20.

The Department proposes to eliminate the statutory provisions related to initial evaluation seven to 10 days and 14 day trial period for acute inpatient intensive rehabilitation services. Acute inpatient intensive rehabilitation services are an intense set of services to rehabilitate a physically or cognitively impaired patient to regain their maximum potential for mobility, self care, independent living. In 2010, CMS determined that trial periods such as these are no longer considered reasonable and necessary for purposes of Medicare coverage.

Each admission decision must be evaluated and based on thorough pre-admission screening. The Department proposes to update state law to conform with evidence based practices, federal Medicare policies, and current Department policies on medical necessity by removing the provision that describes the trial period. Happy to answer any questions.

We have no concerns with this proposal.

Nothing further.

Nothing further on our end either. Hold the item open. We're going to move on to issue number 21.

Thank you. The Department is requesting seven permanent positions, two year limited term resources equivalent to six positions, limited contract expenditure authority and $7.8 million in expenditure authority and budget year for the ongoing support of the Medi-Cal enterprise system modernization efforts.

The department's Medi-Cal enterprise system, or our systems of systems, is an outdated patchwork of systems that struggles to meet business need, react timely to changing federal and state requirements, and is inefficient and unnecessarily costly to maintain. The department's actively planning and executing projects in order to modernize the Medi-Cal system.

Specifically, this request supports ongoing activities for the following projects and efforts providing state staff support, the federal draw and reporting system, continuing support for the implementation of the California Accounts Receivable Management System, and continuing support for completing the planning of the behavioral health modernization completion of the IT project approval lifecycle stage four, and begin data migration and conversion and continuing resource support for strategic level planning of the Medi-Cal enterprise system modernization strategy and architecture. Happy to address questions.

Luke Koushmaro with the LAO, no concerns. Thank you.

Nothing further.

Nothing further on our end. We're going to hold the item open and move on to issue number 22.

The Department requests the extension of nine existing limited term resources for two additional years, an expenditure authority of $1.4 million in budget year. The resources are needed to implement and additionally plan for the interoperability and patient access rule required by the federal centers for Medicaid and Medicare Services. And happy to address questions.

We have not raised concerns with this proposal. It is an April proposal, and we do have a few questions, technical questions that we're still working with the Department to answer, and we'll let the Committee know if anything comes out of tha that's worth noting.

Perfect. Thank you so much.

Happy to answer any questions.

Seeing no questions on our end, we're going to move on to our can you believe it, Senator? We're going to move on to. The last item on our agenda is issue number 23, where we hear proposals for investments. The first few proposals will be here, are Senator sponsored. We have some other ones that we just placed on the agenda. So we already heard the first one. If you remember, we went out of order for Let California Kids Here Act.

I now want to welcome up John Beaman, the CFO of Adventist Health, to join us up here to give a presentation on urgent relief to save California hospitals. As a reminder, stakeholders, you have 3 minutes to present your proposal.

Thank you. Good afternoon, Committee Members. Thank you for the opportunity to come and speak with you today about an important budget ask. My name is John Beaman. I'm the Chief Financial Officer of Adventist Health. I'm here to speak in support of the California Hospital Association's 1.5 billion budget ask. Adventist Health is a system of safety net in rural hospitals serving California communities, from Lodi in Senator Eggman's district, to Bakersfield and Tehachapi in Senator Grove's district, and from LA County all the way to the Mendocino coast.

As a safety net system, approximately 75% of our patients are funded by a governmental entity, either Medi-Cal or Medicare, and less than 20% of our patients have commercial insurance. Like other hospitals in California, Adventist Health suffered greatly during the multiyear Covid-19 pandemic. Both labor cost and supply cost have grown 25% or greater since 2019 and have stayed at those elevated levels.

These rising costs, coupled with Medi-Cal rates that have been frozen for a decade, have created an unsustainable health care delivery system that jeopardizes access to care to those who really need it the most. This financial situation creates hard but necessary decisions, including what services we continue and what services we stop at certain hospitals while still operating in the red. All of this impacts the people who need it the most, and it impacts the broader community.

As hospitals are normally one of the top three employers in their community. We are not alone in the struggle. Data shows that 75% of safety net hospitals are operating in the red, and one in five California hospitals are at risk for closure due to negative operating margins. While we applaud California on expanding Medi-Cal and offering coverage to more individuals, coverage does not equal access. In some low income communities, hospitals have filed bankruptcy or have already closed, leaving those areas undeserved.

Hospital closures can have devastating impacts on their communities. This looks like single mothers who have to find childcare so they can drive an hour or more for services they used to have right in their communities. It looks like emergency rooms that are flooded with dozens of patients on hospital beds stacked up in halls and lobbies. It is also seen in high paying jobs moving out of the communities and less revenue being generated to support other necessary community based work.

In closing, the current financial trend is unstable and will lead to limitation or services provided or even more closures of hospitals. California's healthcare system and safety net need an emergency lifeline to absorb this impact of the inflationary crisis. We are asking the California Legislature to prioritize access to care and health equity by investing significant resources and community safety net hospitals so we can stabilize operations. Please support the request authored by Senator Caballero and cosigned by over a dozen of your colleagues for a $1.5 billion Medi-Cal budget ask to help safety net hospitals.

Hi, and my name is Ben Johnson from the California Hospital Association. Very much appreciate the Committee hearing this issue today, and happy to assist in case the Committee Members have any questions.

Thank you so much. Two questions on my end. How many hospitals will this help -the funding? How many hospitals would it go to?

Currently, the funding would actually, I believe, impact most hospitals in California. This is not limited, although I am here representing safety net hospitals who I believe are at the most extreme end of the situation.

Yes. So we are still working through some of the details on the allocation methodology, but our proposal is to distribute payments based on hospital's share of Medi-Cal patients that they receive, and so the eligibility would be statewide for all hospitals in the state and distributed really on the basis of need, as it's those hospitals that serve the most Medi-Cal patients which are currently suffering from the greatest funding shortfalls and financial challenges.

Just because I don't have this answer, could this help the ones that are already closed to reopen?

Good question. So there is actually another proposal that is moving through the Legislature that is more targeted towards hospitals that are very close to the brink, or such as in the case of Madera Community Hospital, have already closed. And so that would be a more limited loan program that is being pursued under AB 412.

That's right. I'm familiar with.

And that is designed to assist with such hospitals as those have closed.

My other question is, in the brief year Medi-Cal reimbursement rates are stagnant, we don't see anything changing this next year with this request, how do you anticipate it being the fix? Is it a temporary fix in your mind, given that the rates aren't going to go be increased? This seems like an ongoing issue.

Correct. Excellent question. Yes. This is, I would say, a bridge or a stopgap as we look at how do we perhaps redesign work together collaboratively on how Medi-Cal works in the future? But it is a stopgap measure, so.

Should the other proposal not move forward and this is the only fix right now? Do you anticipate this only saving hospitals for a year and then coming back to see if we can reevaluate the other proposal or additional proposals?

As my colleague said, this proposal is designed as a bridge to what we think that is needed in terms of a wider reform of hospital reimbursement in the Medi-Cal program. And so one of the reasons that this is the solution, as opposed to going after maybe a longer term fix at this time. Obviously, we know that the state is dealing with its own financial challenges, and so ongoing spending is - we understand that that's a difficult commitment at this time.

But we also know that actually reforming Medi-Cal rates does take time. We need to work with our state partners at Department of Healthcare Services. The state has to go to the Federal Government to work through rate changes or other forms of supplemental payment changes. And just receiving federal approval can in some cases, actually take months or even years. And so that's why we think that we don't believe our hospitals can survive until that process is fulfilled and that this temporary funding is needed until that time.

Could you send the Committee a list of those hospitals that you mentioned that are at the top, the brink?

We are not sharing, say, a comprehensive list of any hospital that we've heard that can be challenging for those hospitals to announce that, say, their cash runout is going down, because if their employees learn of that or if individuals, their investors learn of that, that can really sort of hasten actually the closure and the other challenges that those hospitals are receiving. However.

To find out how the fund or where the funds exactly are going to go to is going to be really important, at least for me. So any way you can.

We can absolutely provide more information on the intended distribution of this funding and so forth. And we can provide examples of hospitals for which they have been public about the financial challenges and their potential for closing so far.

Senator Eggman.

Yeah. Thank you. And thank you for your proposal. So the hospitals are struggling. How much is it because still recovering from COVID and not being able to do elective procedures. And how much is it is just from a structural imbalance due to reimbursement rates?

Today it is - I'd say the vast majority is your latter comment. It's the structural imbalance where federal and state government reimbursement has either been flat or very little, and the inflationary built up on a five to 10% ... over the last three years is sustained. It hasn't come back down, which it rarely does. I mean, once you raise wages, it's good for the people, it's good for the community. We don't usually go back. And so it's the structural change that is the current crisis, not dealing with the COVID per se.

And as we continue to provide, as we should, Medi-Cal for all people who are eligible, as that continues to roll out. How much more will that impact? What we're looking at, again, for those hospitals who have a high Medicaid population.

It's a fantastic question. Again, I'm very supportive of providing the coverage. The relative balance of health care between how much is Medi-Cal, Medicare, and commercial is just more pronounced in companies like ours, where we are 75% on the governmental. Others have a much higher commercial, and they can find ways to kind of balance that structural imbalance you noted. But continuing the work on providing coverage is definitely beneficial. We just need to find a way on how we pay for how that looks, especially at those hospitals who just have more of it than maybe proportionately than not.

Just one final question. Is there language regarding how hospitals, are you putting language in how hospitals will be able to utilize this funding?

We're absolutely considering sort of what are the potential uses. And we really want that to be based on providing services, providing patient care, supporting our workforces and so forth. So we're absolutely considering commitments in terms of how this funding is utilized.

Right. Thank you so much. Seeing no other question, we're going to hold the item open. Thank you so much for your presentation. And I'd like to welcome now The California Optometric Association to present on Medi-Cal reimbursement rates increase for optometric services. Hi.

Good afternoon Madam Chair. Terry McHale with Aaron Reed & Associates representing The California Optometric Association. And I was listening closely to your comments earlier, Madam Chair, and I'm here to say that I'm swimming against the tide. California Optometric Association is here to ask for $30.5 million in reimbursement increase. In preparation for coming here this morning, Madam Chair, I called the former Chair of the Senate Health Committee, Senator Ed Hernandez, who is an optometrist and walks the walk. He became an optometrist because he wanted to serve his community in south Los Angeles.

And although he's become extremely successful, he still works in the neighborhoods in which he grew up. Ed Hernandez graduated from the University of Indiana in 1986. He gets paid the same amount today for Medi-Cal that he received in 1986. Madam Chair. Dr. Eggman. In 1986, the minimum wage in the State of California was $3.05. The cost to provide this care now exceeds the money they receive. And the crisis that Dr. Hernandez has is that no one else in his area will take Medi-Cal patients now.

So he's taking on a greater and greater load. What once was non feasible has become untenable. We are promising people that we're going to provide care, and yet we do not pay those providers enough to provide that care. And it is a crisis. Madam Chair, one fourth of the children in the State of California do need eye care. Only 15% receive it, 15% of that, 25%. For the seniors, these kinds of examinations reveal high blood pressure, the idea of diabetes, they don't receive that care.

It leads to premature problems, including premature death. I know it's a tough, tough thing to do, but if we are going to promise people that we're going to give them that care, then we at least have to pretend that we're going to pay the providers. I will end it on this. It's bad enough that we haven't done it since 1986 and 87. We are the third lowest reimbursement provider in the entire United States. The national average is $105. We pay 47.

So great doctors and great people like Ed Hernandez will continue to do it, but it becomes increasingly more difficult for others and our children and our seniors and those who are being promised Medicare Medi-Cal suffer. So thank you very much for your patience. And I would hope that on the ask, 30.5 million will also result in a federal match of 30.5 million also. So it'd be a $61 million increase in total. So thank you for your patience.

Thank you. Do you have any questions?

So the proposal is to increase the rate and also provide a plug if.

Yes, ma'am.

As a hospital?

Okay. Thank you.

Yes, Doctor.

Thank you so much for your proposal.

Thank you very much for your patience.

Next, I'd like to welcome up - well from Zoom, the President and owner of the Sun Valley Specialty Care will present Bob Nidam.

Yeah. Good afternoon, Chair Menjivar and the Members. My name is Bob Nidam. I'm the President and owner - with my wife Michelle - of Totally Kids Sun Valley, and we are a freestanding pediatric subacute caring for 45 medically fragile children on ventilators. California has three freestanding pediatric subacutes that care for children who are dependent on medical technology for their survival. Our three facilities save the State of California significant Medi-Cal funds annually by meeting a unique and specialized niche in the healthcare provider market.

With 131 beds statewide, this modality of care conservatively saves the Medi-Cal system about $500,000 a day. I respectfully request your support in helping subacute pediatric facilities by including them in the current Medi-Cal rate hold harmless statutory language. This is a simple equity issue to treat these facilities like other similar facilities and homes and make sure our Medi-Cal rates do not fall below current levels. Our facilities are a smart and effective alternative to far more expensive in hospital and ICU care for medically fragile children.

However, because our rates will decrease once the Federal Covid public health emergency ends, we will see our rates fall unless the Legislature acts. If Medi-Cal current rates are allowed to fall, the increased operational costs driven by the pandemic, the current economic conditions and the nursing staffing shortages will make maintaining the current levels of care extremely difficult at best.

The fiscal impact of the General Fund for all three facilities, which are in Northern California and Southern California, is $1.1 million in 23/24 and $227,000 in 24/25. To include the facilities in the current medical hold harmless statutory language like similar facilities. For these reasons, I am asking that freestanding pediatric subacutes be included in the current hold harmless language to make certain our rates do not fall below the 22/23 levels.

We want to thank Senator Menjivar, who's here today, for her support on this issue. We also want to point out that we have the support of Assemblymember Laura Friedman and the California Association of Healthcare Facilities. Thank you for giving me the opportunity to speak today on behalf of the three freestanding pediatric subacutes in the State of California, and I hope this issue is included and funded in the final budget. That's it.

Thank you. How would you say California is saving the approximately $500,000 a day?

This system of care was created in 1997 because children were trapped in the ICU. They still needed ICU level ventilator care, but they didn't need the full gamut of ICU level care. So they created this system so we could provide that high level respiratory care to kids. There's really nowhere else for these kids to go. If our facilities don't exist, they go back to the ICU at conservatively $5,000 a day. We're 20% of that. 10, really, 15% of that. So that's where the savings come in. You're literally saving thousands of dollars a day on each child.

Perfect. Thank you. And confirming this request is to be distributed at all three sites, correct?

Correct.

And those are the only sites in California that are pediatric subacute facilities.

Freestanding pediatric subacutes? Correct. There's three of us.

Thank you so much, Senator Eggman. Thank you for your presentation. We're going to hold the item open and move on to Danny Offer, who's representing NAMI California, who will present on self help programs to families and individuals living with a mental illness.

Thank you, Madam Chair, Honorable Member. My name is Danny Offer with the National Alliance on Mental Illness, fondly known as NAMI California. Just wanted to thank you for considering our request for the two million dollars to fund our self-help Family-to-Family courses. These courses are a lifeline for families who struggle to care for their loved ones with mental illness.

The NAMI Family-to-Family Program is a 12-week course led by trained family members who understand firsthand the unique challenges of caring for a loved one living with mental illness, and this is all offered for free across the country. The course helps family members improve their well-being, their coping skills, knowledge of mental illness and treatment options, as well as how to manage their own emotional reactions and conflicts.

Many family members play a critical role in supporting their loved ones who are living with a mental illness. In many cases, we're the primary unpaid caregiver, providing food, clothing, and shelter to our loved ones. And without this family support, many of our loved ones could end up relying on state and local government resources like homeless services, hospitalization, and unfortunately, incarceration.

Family members often bear the burden of navigating a complex and sometimes inadequate health care system, all while coping with the emotional toll of watching their loved ones suffer. They face significant challenges that can have a profound impact on their lives, such as financial strain, emotional stress, social isolation, and lack of resources. Investing in programs like NAMI's Family-to-Family is not only the compassionate thing to do, it's also a smart fiscal decision that can benefit both families as well as the state.

By supporting families in their efforts to care for loved ones, we can help prevent costly crises and ensure that our loved ones receive the care they need so they can live healthy, fulfilling lives. The NAMI Family-to-Family Program is life-changing for the thousands of families who have participated. Many have described how it gave them hope, let them know they're not alone, and some even said it saved their lives.

These families need our support, and the NAMI Family-to-Family Program is one of the most effective ways we can provide it. I urge you to consider this program and the impact it could have on the lives of those in need. Thank you for your time. I'm here for any questions.

Thank you so much, Danny. For how long will this funding provide these services to families?

I don't have the exact estimate, but I believe it should be for about three years. We could do approximately 135 statewide trainings to train the people to teach these courses, adding almost 1,600 new trainers, which could teach about 80,000 additional families annually.

Perfect. Thank you.

Just to say, I'm a huge supporter of NAMI and the work they do. We hear from a lot of our counties are overwhelmed. Having people with lived experience, family members reaching out to more family members and being able to do this work, I just think is incredibly important, especially in hard to reach areas, so I just appreciate your work.

Thank you.

Thank you so much for your presentation. We're going to hold the item open. I'd like to welcome Cyndi Hillery, Vice President of Government Affairs for WelbeHealth, and they'll be presenting three-month deeming for PACE Medi-Cal enrollees.

Hi there. Thank you, Chair and Senator. Thank you so much for taking the time today to hear this important issue affecting California's most frail seniors. I'm Cyndi Hillery, Vice President of Government Affairs for WelbeHealth, a provider of programs of all-inclusive care for the elderly or more widely known as PACE programs, which provide high touch, team-based, highly coordinated medical and social services to frail seniors who have multiple complex medical conditions.

This proposal would enable participants who lose Medi-Cal coverage to remain eligible for PACE services for at least three months, enabling a PACE program to assist that participant in curing their Medi-Cal eligibility issue.

Approximately 99 percent of PACE-eligible participants in California are also Medi-Cal-eligible. Because of this, PACE participants deemed ineligible for Medi-Cal during a redetermination process are, in all but a very few cases, still eligible for Medi-Cal. The determination of ineligibility is often a technical or clerical error: a missed form, a physician signature, and is ultimately cured with reinstatement in Medi-Cal.

However, in the event a participant loses Medi-Cal eligibility due to missteps with redetermination, the individual is disenrolled from PACE if the issue is not resolved within two months. PACE participants are medically complex and very frail, often suffering from six to eight chronic conditions, including cognitive impairments, so any discontinuity in care will likely be very detrimental to the participant's health, well-being, and future outcomes.

Moreover, because PACE is a whole person wraparound program providing physical, behavioral, and social services, including medication, behavioral health, home care, and transportation, just to name a few, a disconnection in services can create compounding issues, which may end up with that participant in the ER or in a nursing home. In CalAIM, dual eligible special needs plans, D-SNPs, maintain enrollment for members for at least a three-month deeming period following notification of the member having lost Medi-Cal eligibility.

Deeming allows a beneficiary who has lost full scope Medi-Cal eligibility to remain in their health plan for a certain period before being disenrolled from the plan to give time to cure errors before that individual is disconnected from their services. This proposal would bring policy regulating PACE organizations into conformity with existing policy for D-SNPs, as to Medi-Cal eligibility.

Allowing participants to remain enrolled in their PACE plans during a deeming period will minimize disruption, prevent loss of services, and allow the PACE plan the time necessary to assist any paperwork issues affecting the individual's Medi-Cal redetermination. Thank you so much for your time. Happy to answer questions.

Recognizing there is no fiscal number attached to this, just anecdotally, how often are you seeing this happen?

So it doesn't happen very frequently, as I mentioned, because most of our participants are duly eligible for Medi-Cal and Medicare, but when it does happen, it's really, really dramatic, right? Somebody can be disconnected from their medication or home care services. Home care services are usually help with toileting and bathing and dressing, and so any discontinuity in that care has dramatic ramifications. And so we don't believe the cost is going to be particularly high because the large majority of people who fall into this situation are still eligible for Medi-Cal.

And our hope is that any additional cost from individuals who are deemed to be ineligible truly would be outweighed by the administrative cost of having to disenroll and then re-enroll all the others.

Certainly.

Thank you.

And do you have an idea about how many people this is? And I'm thinking you're doing this in anticipation of the automatic re-enrollment stopping and then a lot of people falling off.

So is this just time limited and do you have any idea about how many folks would be impacted?

Absolutely.

I don't have that number. I can get back to you with it, but I think that's definitely a trigger, but we've already seen it happening, even during the PHE, so we do know that it's going to continue to be a problem.

Thank you.

Thank you so much for presentation. We're going to hold the item open.

Thank you.

I'd like to welcome Dean Chalios, President and CEO of the California Association of Health Services at Home, presenting the private duty nursing Medi-Cal reimbursement rate increase.

Good afternoon, Senator Menjivar, Senator Eggman. I'm Dean Chalios. I'm the President and CEO of the California Association for Health Services at Home, representing home health, hospice, and home care providers across the state.

And I'm here today to talk to you about medically fragile children, Medi-Cal beneficiaries, and the importance of caring for them in their homes rather than in hospitals or other health care facilities. These are medically fragile kids. They're really sick, and they have a lot of needs, and their parents aren't able to provide the care that they need.

So they have to rely on nurses--private duty nurses is how we refer to it--to manage their feeding tubes in their ventilators and provide other life-sustaining services that they need, nursing services. Unfortunately, due to woefully inadequate Medi-Cal reimbursement rates, we're not able to attract those highly skilled nurses to home care to provide care for these kids.

And the result is that many of them, despite the fact that they've been authorized by Medi-Cal to receive care in the home, end up staying in the hospital at a cost of 5,000, 7,000, 10,000 dollars a day, when they can be cared for in the home, in the safety and comfort and familiarity of their home, for about 1,500 dollars a day.

So if you calculate the cost of the 40 percent increase we're asking for, for the nurses to take care of these children versus what it costs to keep them in the hospital, it's an overall savings to the Medi-Cal Program annually of upwards of 800 million dollars a year. These families suffer greatly, and they struggle to know that their children are away from them in the hospital when they could be home being cared for very well with the love of their family around them.

So I'm happy to answer any questions that you have. We feel strongly that the warmth of the home is preferable to keeping them in the hospital, and I'm happy to answer any questions you might have.

What are we seeing right now with the current nurses you have and the capacity and the workload?

It's tough. We're seeing--our agencies, we hear from some that are turning away 90 percent of the referrals that they get to take care of these kids because they can't find the nurses to care for them and to pay them adequately to provide the care.

There was recently an audit, if you want a report that came out. Can you share some of the findings?

Yeah. Well, those are the figures that I shared with you. The ask is about 310 million dollars.

Do we know the waitlist, the number of children--

There are innumerable--it's hard to get the numbers because we haven't been able to get from the Medi-Cal Program how many kids have been authorized and how many of those authorizations have actually been filled. We hear anecdotally that it is very serious.

Senator Eggman? I'm wondering--usually LAO, DOF doesn't provide any comment--this is not a new theme, and I'm wondering if there's any comments regarding previous conversations looking at this and how much the state could save.

I'm happy to speak for them.

Andrew Duffy, Department of Finance. We don't have anything to share at this moment, but our team has met with the stakeholders and we continue to evaluate the proposal.

Similarly, Luke Koushmaro with LAO. We have not done an analysis of this proposal, but we're happy to work with staff if there are any issues to look into.

Yeah, I'm really interested in this. Just the numbers that I've received are very staggering in how much the state would save in getting their children out of the hospitals.

And if LAO just--could we look into this a little bit more? I want to make sure that the numbers presented to us are accurately being--you also see those numbers: 5,000, 7,000, 10,000 dollars a day in the hospital compared to how much you said?

About 1,500, depending.

1,500 dollars? That's a staggering savings, savings that we could utilize for other things that we were being asked for here. So I'd like to focus a little bit on this topic to see if we can figure out some of these numbers here.

And we're happy to work with you on that.

I'll just say, not to mention that the rate of people getting infections in hospital goes up, being away from family goes up, all of that. Yep. And families having to travel back and forth from home to a hospital setting.

Or the families that weren't really able to see their kids during Covid because they couldn't enter the hospital, so thank you so much. We're going to hold this item open.

Thank you.

And that was the last proposal we have for presentation. I do want to note two other proposals in the agenda was for Medi-Cal benefit for housing support services and the family support services positive parenting support services. We have now entered the public comment phase of our hearing. As a reminder, those who want to participate via the teleconference, our number today is 1877-226-8163 with the access code of 7362834. We'll begin today with witnesses in Room 1200. One minute, please.

Thank you very much, Madam Chair and Members. Vanessa Cajina, on behalf of CalPACE, the statewide program of all-inclusive care for the elderly. On DHCS, Issue 14, CalPACE is pleased to support DHCS's DCP to increase staffing levels to oversee PACE programs. Our enrollees, as you heard earlier today, are all aged 55 and older, low-income, and could qualify for a nursing home level of care.

Given that frail population and the highly coordinated care that we provide, PACE is highly regulated, and we work closely with DHCS and CMS to ensure the highest levels of care. The Subcommittee's analysis provides a really good background on the growth of PACE in the past eight years, and we're excited to see that growth, especially in regions that have been underserved by PACE traditionally. We are encouraged by this BCP. We believe that DHCS needs those positions, and we're excited by it. Thank you.

Thank you so much.

Good afternoon, Chair and Members. Michelle Cabrera with the County Behavioral Health Directors Association of California, and we just want to appreciate the Committee for including the County Behavioral Health Directors's perspective today on 988 and the crisis care continuum, and we align ourselves with their comments. I'd also like to comment on numerous of the other items raised today. On the CalBH-CBC, CBHDA supports many of the concepts put forward as part of that proposal, but we have concerns with the fiscal estimate.

We believe that we will incur far fewer savings than are attributed currently. On 988, we appreciate the cleanup language from the Administration to shore up the ability of county behavioral health providers to bill private insurance plans, as 70 percent of Californians today have some form of commercial coverage. On CareCorp, we're working closely with the Administration to derive a shared estimate on ongoing funding that will be needed to support this new initiative, which will go live later this year.

On BHCIP, we just want to note our Kern County behavioral health's presentation and how they, along with many counties, are still awaiting word on round five, but also have applications that were not funded in prior rounds. County behavioral health actually represented only a third of the BHCIP grantees, and so we are not the primary recipients of those funds. We strongly urge approval of the--

You'll have to wrap up.

Payment Reform Proposal and would ask that you reject SB 929 trailer bill. We appreciate the Committees hearing our comments, and especially the Chair's comments on the harm reduction component of the opioid settlement funds today. Thank you.

Thank you.

Good afternoon. Linda Nguy with Western Center on Law and Poverty. Firstly, we appreciate the full budget hearing on CalAIM and inclusion in today's agenda, our request to make housing support services a Medi-Cal benefit. Sponsored by Senator Blakespear and Stern, housing support services connect people experiencing homelessness with housing and keep them stably housed.

A shift from a plan option as a community support to a Medi-Cal benefit more equitably and broadly serves enrollees experiencing homelessness, improves health outcomes for individuals who die 25 to 30 years younger than their housed people with similar conditions, reduces homelessness, and draws down federal funds that we're currently leaving on the table.

We also support the Newborn Hospital Gateway trailer bill language and request this be extended to infants born to the Medi-Cal Access Program participants, and we support a requirement that insurance cover hearing aids for children and youth, and finally, as co-sponsors of AB 1355, related to state fair hearings, we support the corresponding BCP. Thank you.

Thank you so much.

Madam Chair, Senator Eggman, Rand Martin, here on behalf of Aveanna Healthcare. Let me expand on Mr. Chalios's comments relative to the private duty nursing on two points. One, in answer to your question, Senator, Madam Chair, about the waiting list, I can't speak to it statewide or for all providers, but I can tell you from Aveanna's perspective, we have upwards of 300 people on our waiting list, and I want to tell you that waiting list is a misnomer because they never get off because they're not enough nurses for us to move those kids off the waiting list. So they sit there forever until we can get this issue resolved.

The other point I want to make, Mr. Ogus, in his background piece, talked about David Maxwell-Jolly's analysis of this, which is really good, but there is also another analysis done by the Berkeley Research Group, one of the most respected health analysts in the state, and they have reached the same conclusion, that there are 25 percent of the hours that have been authorized that are not being utilized, and as a result, the cost going into the hospital is substantially higher than it needs to.

They peg it at more than 300 million dollars that we're spending in the hospitals unnecessarily that we could be putting back into the state budget for other purposes, as you rightly noted. Thank you.

Thank you, Mr. Martin.

Hi. Corey Ayala, representing Maxim Healthcare. We have a waiting list of about 300 children as well. We serve about 10,000 pediatric patients in their home and sometimes not able to fulfill the hours that are authorized for those children. So we appreciate the Committee's attention to the pediatric--private duty nursing Medi-Cal reg. Thank you.

Thank you.

Madam Chair, Senator Eggman, Peter Kellison, on behalf on two different issues. The first is for St. Paul's PACE Program. It's based in San Diego. We're here in support of the Department's BCP to fund staffing, as that'll enable us to better care for the enrollees. Secondly, on behalf of the Pediatric Day Health Care Coalition, we support the private duty nursing request.

Our client are facilities that provide respite care and provide hands-on care to the most disabled kids in the state. Many of the facilities are struggling to continue. This would provide them the relief to continue to serve. Thank you.

Thank you.

Good afternoon, Madam Chair, Senator Eggman. Jennifer Snyder, on behalf of the California Association of Health Facilities. We'd like to comment on Issue Nine relative to the Department's CalAIM budget trailer bill request and also the proposal for investment for pediatric subacute facilities. First want to say that we strongly support the trailer bill language related to postponing the implementation of CalAIM for the ICF/DD population, and also the pediatric subacutes really find that very supportive of that and had asked for that delay.

We'd like the Department to actually reevaluate the delay for adult subacute facilities. We don't think is much needed, and it also actually has an impact on whether or not they'll qualify for the quality incentive payments under the Medi-Cal rate system.

Just a quick note to say we also support the pediatric subacute facilities' proposal for investment, which allows for them to be held harmless from any decrease in their Medi-Cal rates. And that's incredibly important for those pediatric subacute facilities to make sure that they don't close. Lastly, I just want to note that California Association's nursing facility members are having a heck of a time relative to implementation of CalAIM. Both issues relate to contracting and also issues related to payment.

Under contracting, managed care plans are not following through with their contracting responsibilities, so nursing facilities are being forced to take Medi-Cal patients without a contract or continue to care for Medi-Cal patients outside of a contract. Second, relative to payment, our nursing facilities, many of them have not been paid since the start of the implementation January 1st.

So we're almost on four months without any payment to many of our nursing facilities in the Medi-Cal Program, and they're used to usually a payment within every two weeks when they were under Medi-Cal fee for service. We've asked for additional trailer bill language to be added to the CalAIM proposal trailer bill language that the Department has and would encourage the Subcommittee to look at that language. Thank you very much.

Thank you.

Cyndi Hillery with WelbeHealth again. Just wanted to add my voice to CalPACE's on Issue 14 for the ten new PACE positions at Department of Health Care Services. Thank you.

Thank you.

Kelly Brooks. Kelly Brooks, commenting on behalf of two clients this afternoon. First, on behalf of the California Association of Public Hospitals and Health Systems, public health care systems are facing a growing structural deficit, mostly due to the fact that they provide 40 percent of all hospital care to Medi-Cal beneficiaries in the communities that they serve and receive rates for those services that do not come close to covering the cost of that care. Funding is needed now more than ever to protect our patients most at risk, especially as we face economic uncertainties.

To help address this, CAPH supports the hospital industry's request for 1.5 billion dollars in one-time funding to hospitals that care for those most in need. We look forward to working with the Administration and Legislature to identify strategies to further support the health care safety net and ensure that millions of Californians who rely on Medi-Cal can continue to be served by public health care systems.

On issue 19, CAPH is supportive of the policy but has concerns about the 24-hour reporting requirement and look forward to working on changes to make the proposal more workable. Finally, on behalf of the Center for Elders' Independence, a PACE program serving patients in Alameda and Contra Costa Counties, we support Issue 14. The Department being adequately staffed is critical to our mission to serve frail seniors. Thank you.

Thank you.

Good afternoon, Madam Chair and Members. Adrienne Shilton with the California Alliance of Child and Family Services. We'd like to start, Chairman Menjivar, by thanking you so much for your comment earlier today about the needs of STRTPs and specifically issues related to workforce challenges. We really appreciate you highlighting these issues that our members are facing serving foster youth, and so we like to continue to be a resource to you. And I also wanted to note our concerns about Issue Number Five under DHCS regarding the PRTF trailer bill. The California Alliance was the sponsor of this legislation to stand up these critically-needed programs.

These are alternatives to hospitalization for kids. And so we've been working collaboratively with DHCS on our concerns, specifically related to the change in staffing requirements, and so we look forward to resolving those together, and we have submitted a letter on record to Budget Subcommittee as well. Thank you.

Thank you.

Good afternoon, Madam Chair and Members. Kathleen Soriano, on behalf of Keck Medicine of the University of Southern California. We are pleased to support the California Hospital Association's budget request for a one-time emergency infusion of 1.5 billion dollars to support care for Medi-Cal patients in California hospitals so hospitals such as Keck can continue to provide care for vulnerable communities throughout the state. This one-time funding will protect access to care and stabilize the health care delivery system for California's most vulnerable communities and help protect access for Californians with the greatest health needs. We appreciate your consideration. Thank you.

Thank you.

Good afternoon, Madam Chair and Member, Senator Eggman. Connie Delgado, on behalf of the District Hospital Leadership Forum. These are the 33 district and municipal hospitals in the State of California. These are standalone facilities. We are here in support of the CHA 1.5 billion dollar ask. These are standalone facilities. They make it or break it on their own. In 19 counties, they are the only hospital.

So we want to ensure that those services are there when the California patients need it, and we really are looking forward to some action to keep these hospitals and all hospitals open. Thank you.

Thank you.

Good afternoon, Madam Chair and Senator Eggman. Amy Blumberg with the California Children's Hospital Association, representing the eight freestanding nonprofit children's hospitals in the state. We serve some of the state's most medically complex and fragile pediatric patients in the state.

On average, 62 percent of our patients are on Medi-Cal and some of our hospitals at 70 to 75 percent. On DHCS Issue Number Five: children's psychiatric residential treatment facilities, I'd like to align my comments with the California Alliance of Child and Family Services and strongly encourage the Department to consider proposed amendments concerning who's on the interdisciplinary team, as this is critical for these programs to be staffed. CHA also supports Let California Kids Hear Act proposal and the Private Duty Nursing Medi-Cal Reimbursement Rate increase proposal.

And finally, CCHA strongly supports the California Hospital Association's 1.5 billion dollar budget request to assist California's hospitals who are struggling financially. California Children's Hospitals serve nearly twice the percentage of Medi-Cal patients as community hospitals, and as a result of these very low Medi-Cal rates that have not been increased in over a decade, we are disproportionately impacted. This funding is needed to continue serving our high medically fragile pediatric patients. Thanks for your consideration.

Thank you so much.

Good afternoon, Chair, Senator Eggman. Jolie Onodera with the California State Association of Counties, representing all 58 counties. CSAC appreciates the Legislature and Governor's continued commitment to significant investments to support the CalAIM initiative. We recognize the potential benefits of the Behavioral Health Community-Based Continuum Demonstration waiver. We look forward to continued collaboration with both the Legislature and the Administration to reach the demonstration's goals.

CSAC also strongly supports the one-time investment for Behavioral Health Payment Reform, which we think is critical for counties as they prepare to implement July 1st of this year. Thank you.

Thank you. Good afternoon, Madam Chair and Senator Eggman, I'm Seija Virtanen for the University of California. We request your support for Issue 23: Urgent Relief for California's Hospitals. University of California is the second largest provider of Medi-Cal services in the state by most hospital metrics, and that's despite having less than six of the acute care beds in the state. University of California is being uncompensated by about $1 billion annually for this care due to the low Medi-Cal reimbursement rates.

Like many other hospitals in the state, we are struggling with staffing shortages, new costs due to inflation and other pressures. And so we request your support for the CHA request for 1.5 billion for stabilizing California's hospitals. Thank you very much.

Thank you.

Good afternoon, Madam Chair and Senator Eggman. Nora Lynn-Asbrick, representing Prime Home Health and Team Select. Prime Home Health and Team Select are providers of in-home private-duty nursing to the state's most medically vulnerable and fragile children in the state.

We support the California Association for Health Services at Home. Their request to increase Medi-Cal reimbursement for private duty nursing by 40% to increase access to adequate nurses to care for these children at home. Thank you.