Bill Text: CA AB1297 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Medi-Cal: mental health.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2011-10-09 - Chaptered by Secretary of State - Chapter 651, Statutes of 2011. [AB1297 Detail]

Download: California-2011-AB1297-Amended.html

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BILL NUMBER: AB 1297	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 9, 2011

INTRODUCED BY   Assembly Member Chesbro

                        FEBRUARY 18, 2011

   An act to amend Sections 5718, 5720, 5724, 5778, 14680, and 14684
of the Welfare and Institutions Code, relating to mental health.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1297, as amended, Chesbro. Medi-Cal: mental health.
   Existing law provides for the Medi-Cal program, administered by
the State Department of Health Care Services, under which qualified
low-income persons are provided with health care services, including
mental health services. The Medi-Cal program is partially governed
and funded under federal Medicaid provisions. Under existing law, the
State Department of Mental Health (department) is required to
provide specialty mental health services for Medi-Cal recipients
through fee-for-service or capitated contracts with mental health
plans (MHPs). The department establishes standards, guidelines, and
reimbursement amounts for specialty mental health services based on
the federal Medicaid requirements.  Existing law establishes
procedures, including reimbursement and claiming procedures, reviews
and oversight, and appeal processes for MHPs and MHP subcontractors.
  Existing law, requires counties to certify that
required matching funds are available prior to the reimbursement of
federal funds. 
   This bill would require the standards, guidelines, and
reimbursement amounts to be  set in accordance with 
 no more restrictive than  federal Medicaid requirements
 and   , as specified in  the approved
Medicaid state plan and waivers.  The  The bill
would also require   counties to certify that certified
public expenditures have been incurred prior to reimbursement. 

    Existing law establishes procedures, including reimbursement and
claiming procedures, reviews and oversight, and appeal processes for
MHPs and MHP subcontractors. 
    The  bill also would require  bills 
 claims for reimbursement  for service to be submitted by
MHPs within the timeframes required by federal Medicaid requirements
and the approved Medicaid state plan and waivers.
   Existing law requires the State Department of Health Care Services
and the State Department of Mental Health to jointly develop a new
ratesetting methodology for reimbursements for direct client services
that meets specified requirements, including that administrative
costs be claimed separately and limited to 15% of the total cost of
direct client services.
   This bill would instead require the development of a 
ratesetting   reimbursement  methodology  , in
consultation with the California Mental Health Directors Association,
 that conforms with the federal Medicaid requirements and the
approved Medicaid state plan and waivers.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 5718 of the Welfare and Institutions Code is
amended to read:
   5718.  (a) (1) This section and Sections 5719 to 5724, inclusive,
shall apply to mental health services provided by counties to
Medi-Cal eligible individuals. Counties shall provide services to
Medi-Cal beneficiaries and seek the maximum federal reimbursement
possible for services rendered to the mentally ill.
   (2) To the extent permitted under federal law, funds deposited
into the local health and welfare trust fund from the Sales Tax
Account of the Local Revenue Fund may be used to match federal
medicaid funds in order to achieve the maximum federal reimbursement
possible for services pursuant to this chapter.  If a county
applies to use local funds, the department may enforce any additional
federal requirements that use may involve, based on standards and
guidelines designed to enhance, protect, and maximize the claiming of
those resources. 
   (3) The  department's  standards and guidelines
for the administration of mental health services to Medi-Cal eligible
persons shall be  based on federal medicaid  
no more restrictive than federal Medicaid  requirements 
and   , as specified in  the approved Medicaid
state plan and waivers to ensure full and timely federal
reimbursement to counties for services that are rendered and claimed
consistent with federal Medicaid requirements.
   (b) With regard to each person receiving mental health services
from a county mental health program, the county shall determine
whether the person is Medi-Cal eligible and, if determined to be
Medi-Cal eligible, the person shall be referred when appropriate to a
facility, clinic, or program which is certified for Medi-Cal
reimbursement.
   (c) With regard to county operated facilities, clinics, or
programs for which claims are submitted to the department for
Medi-Cal reimbursement for mental health services to Medi-Cal
eligible individuals, the county shall ensure that all requirements
necessary for Medi-Cal reimbursement for these services are complied
with, including, but not limited to, utilization review and the
submission of year-end cost reports by December 31 following the
close of the fiscal year.
   (d) Counties shall certify to the state that required 
matching funds are available   certified public
expenditures have been incurred  prior to the reimbursement of
federal funds.
  SEC. 2.  Section 5720 of the Welfare and Institutions Code is
amended to read:
   5720.  (a) Notwithstanding any other provision of law, the
director, in the 1993-94 fiscal year and fiscal years thereafter,
subject to the approval of the Director of Health Care Services,
shall establish the amount of reimbursement for services provided by
county mental health programs to Medi-Cal eligible individuals. For
purposes of federal reimbursement, the reimbursement amounts shall be
consistent with federal Medicaid requirements  and 
 for calculating federal upper payment limits, as specified in
 the approved Medicaid state plan and waivers.
   (b) Notwithstanding this section, in the event that a health
facility has entered into a negotiated rate agreement pursuant to
Article 2.6 (commencing with Section 14081) of Chapter 7 of Part 4 of
Division 9, the facility's rates shall be governed by that
agreement.
  SEC. 3.  Section 5724 of the Welfare and Institutions Code is
amended to read:
   5724.  (a) The department and the State Department of Health Care
Services shall jointly develop  a new ratesetting 
 , in consultation with the California Mental Health Directors
Association, a reimbursement  methodology for use in the
Short-Doyle Medi-Cal system that maximizes federal funding and
utilizes, as much as practicable, federal Medicaid and Medicare
reimbursement principles. The departments shall work with 
the counties and  the federal Centers for Medicare and
Medicaid Services in the development of the methodology required by
this section.
   (b)  Rates   Reimbursement amounts 
developed through the methodology required by this section shall
conform to federal Medicaid requirements and the approved Medicaid
state plan and waivers.
   (c) Administrative costs  incurred by counties for activities
necessary for the administration of the mental health plan 
shall be  claimed   reimbursed  in a manner
consistent with federal Medicaid requirements and the approved
Medicaid state plan and waivers.
   (d) The cost of performing  utilization reviews 
 quality assurance and utilization review a   ctivities
 shall be  claimed   reimbursed 
separately and shall not be included in administrative cost.
   (e) The  ratesetting   reimbursement 
methodology established pursuant to this section shall 
contain incentives relating to   be based upon certified
public expenditures, which encourage  economy and efficiency in
service delivery.
   (f) The  rates   reimbursement amounts
established for direct client services pursuant to this section shall
be based on increments of time for all noninpatient services.
   (g) The  ratesetting  reimbursement 
methodology shall not be implemented until it has received any
necessary federal approvals.
  SEC. 4.  Section 5778 of the Welfare and Institutions Code is
amended to read:
   5778.  (a) This section shall be limited to specialty mental
health services reimbursed through a fee-for-service payment system.
   (b) The following provisions shall apply to matters related to
specialty mental health services provided under the Medi-Cal
specialty mental health services waiver, including, but not limited
to, reimbursement and claiming procedures, reviews and oversight, and
appeal processes for mental health plans (MHPs) and MHP
subcontractors.
   (1) During the initial phases of the implementation of this part,
as determined by the department, the MHP contractor and
subcontractors shall submit claims under the Medi-Cal program for
eligible services on a fee-for-service basis.
   (2) A qualifying county may elect, with the approval of the
department, to operate under the requirements of a capitated,
integrated service system field test  ,  pursuant to Section
5719.5 rather than this part, in the event the requirements of the
two programs conflict. A county that elects to operate under that
section shall comply with all other provisions of this part that do
not conflict with that section.
   (3) (A) No sooner than October 1, 1994, state matching funds for
Medi-Cal fee-for-service acute psychiatric inpatient services, and
associated administrative days, shall be transferred to the
department. No later than July 1, 1997, upon agreement between the
department and the State Department of Health Care Services, state
matching funds for the remaining Medi-Cal fee-for-service mental
health services and the state matching funds associated with field
test counties under Section 5719.5 shall be transferred to the
department.
   (B) The department, in consultation with the State Department of
Health Care Services, a statewide organization representing counties,
and a statewide organization representing health maintenance
organizations shall develop a timeline for the transfer of funding
and responsibility for fee-for-service mental health services from
Medi-Cal managed care plans to MHPs. In developing the timeline, the
department shall develop screening, referral, and coordination
guidelines to be used by Medi-Cal managed care plans and MHPs.
   (4) (A) (i) A MHP subcontractor providing specialty mental health
services shall be financially responsible for federal audit
exceptions or disallowances to the extent that these exceptions or
disallowances are based on the MHP subcontractor's conduct or
determinations.
   (ii) The state shall be financially responsible for federal audit
exceptions or disallowances to the extent that these exceptions or
disallowances are based on the state's conduct or determinations. The
state shall not withhold payment from a MHP for exceptions or
disallowances that the state is financially responsible for pursuant
to this clause.
   (iii) A MHP shall be financially responsible for state audit
exceptions or disallowances to the extent that these exceptions or
disallowances are based on the MHP's conduct or determinations. A MHP
shall not withhold payment from a MHP subcontractor for exceptions
or disallowances for which the MHP is financially responsible
pursuant to this clause.
   (B) For purposes of subparagraph (A), a "determination" shall be
shown by a written document expressly stating the determination,
while "conduct" shall be shown by any credible, legally admissible
evidence.
   (C) The department and the State Department of Health Care
Services shall work jointly with MHPs in initiating any necessary
appeals. The department may invoice or offset the amount of any
federal disallowance or audit exception against subsequent claims
from the MHP or MHP subcontractor. This offset may be done at any
time, after the audit exception or disallowance has been withheld
from the federal financial participation claim made by the State
Department of Health Care Services. The maximum amount that may be
withheld shall be 25 percent of each payment to the plan or
subcontractor.
   (5) (A) Oversight by the department of the MHPs and MHP
subcontractors may include client record reviews of Early Periodic
Screening Diagnosis and Treatment (EPSDT) specialty mental health
services under the Medi-Cal specialty mental health services waiver
in addition to other audits or reviews that are conducted.
   (B) The department may contract with an independent,
nongovernmental entity to conduct client record reviews. The contract
awarded in connection with this section shall be on a competitive
bid basis, pursuant to the Department of General Services contracting
requirements, and shall meet both of the following additional
requirements:
   (i) Require the entity awarded the contract to comply with all
federal and state privacy laws, including, but not limited to, the
federal Health Insurance Portability and Accountability Act (HIPAA;
42 U.S.C. Sec. 1320d et seq.) and its implementing regulations, the
Confidentiality of Medical Information Act (Part 2.6 (commencing with
Section 56) of Division 1 of the Civil Code), and Section 1798.81.5
of the Civil Code. The entity shall be subject to existing penalties
for violation of these laws.
   (ii) Prohibit the entity awarded the contract from using, selling,
or disclosing client records for a purpose other than the one for
which the record was given.
   (C) For purposes of this paragraph, the following terms shall have
the following meanings:
   (i) "Client record" means a medical record, chart, or similar
file, as well as other documents containing information regarding an
individual recipient of services, including, but not limited to,
clinical information, dates and times of services, and other
information relevant to the individual and services provided and that
evidences compliance with legal requirements for Medi-Cal
reimbursement.
   (ii) "Client record review" means examination of the client record
for a selected individual recipient for the purpose of confirming
the existence of documents that verify compliance with legal
requirements for claims submitted for Medi-Cal reimbursement.
   (D) The department shall recover overpayments of federal financial
participation from MHPs within the timeframes required by federal
law and regulation and return those funds to the State Department of
Health Care Services for repayment to the federal Centers for
Medicare and Medicaid Services. The department shall recover
overpayments of General Fund moneys utilizing the recoupment methods
and timeframes required by the State Administrative Manual.
   (6) (A) The department, in consultation with mental health
stakeholders, the California Mental Health Directors Association, and
MHP subcontractor representatives, shall provide an appeals process
that specifies a progressive process for resolution of disputes about
claims or recoupments relating to specialty mental health services
under the Medi-Cal specialty mental health services waiver.
   (B) The department shall provide MHPs and MHP subcontractors the
opportunity to directly appeal findings in accordance with procedures
that are similar to those described in Article 1.5 (commencing with
Section 51016) of Chapter 3 of Subdivision 1 of Division 3 of Title
22 of the California Code of Regulations, until new regulations for a
progressive appeals process are promulgated. When an MHP
subcontractor initiates an appeal, it shall give notice to the MHP.
The department shall propose a rulemaking package by no later than
the end of the 2008-09 fiscal year to amend the existing appeals
process. The reference in this subparagraph to the procedures
described in Article 1.5 (commencing with Section 51016) of Chapter 3
of Subdivision 1 of Division 3 of Title 22 of the California Code of
Regulations, shall only apply to those appeals addressed in this
subparagraph.
   (C) The department shall develop regulations as necessary to
implement this paragraph.
   (7) The department shall assume the applicable program oversight
authority formerly provided by the State Department of Health Care
Services, including, but not limited to, the oversight of utilization
controls as specified in Section 14133. The MHP shall include a
requirement in any subcontracts that all inpatient subcontractors
maintain necessary licensing and certification. MHPs shall require
that services delivered by licensed staff are within their scope of
practice. Nothing in this part shall prohibit the MHPs from
establishing standards that are in addition to the minimum federal
and state requirements, provided that these standards do not violate
federal and state Medi-Cal requirements and guidelines.
   (8) Subject to federal approval and consistent with state
requirements, the MHP may negotiate rates with providers of mental
health services.
   (9) Under the fee-for-service payment system, any excess in the
payment set forth in the contract over the expenditures for services
by the plan shall be spent for the provision of specialty mental
health services under the Medi-Cal specialty mental health service
waiver and related administrative costs.
   (10) Nothing in this part shall limit the MHP from being
reimbursed the full and appropriate federal financial participation
for any qualified services even if the total expenditures for service
exceeds the contract amount with the department. Matching nonfederal
public funds shall be provided by the plan for the federal financial
participation matching requirement.
   (11) Notwithstanding Section 14115,  bills  
claims for reimbursement  for service pursuant to this part
shall be submitted by MHPs within the timeframes required by federal
Medicaid requirements and the approved Medicaid state plan and
waivers.
   (c) This subdivision shall apply to managed mental health care
funding allocations and risk-sharing determinations and arrangements.

   (1) The department shall allocate and distribute annually the full
appropriated amount to each MHP for the managed mental health care
program, exclusive of the EPSDT specialty mental health services
program, provided under the mental health services waiver. The
allocated funds shall be considered to be funds of the plan to be
used as specified in this part.
   (2) Each fiscal year the state matching funds for Medi-Cal
specialty mental health services shall be included in the annual
budget for the department. The amount included shall be based on
historical cost, adjusted for changes in the number of Medi-Cal
beneficiaries and other relevant factors. The appropriation for
funding the state share of the costs for EPSDT specialty mental
health services provided under the Medi-Cal specialty mental health
services waiver shall only be used for reimbursement payments of
claims for those services.
   (3) Initially, the MHP shall use the fiscal intermediary of the
Medi-Cal program of the State Department of Health Care Services for
the processing of claims for inpatient psychiatric hospital services
and may be required to use that fiscal intermediary for the remaining
mental health services. The providers for other Short-Doyle Medi-Cal
services shall not be initially required to use the fiscal
intermediary but may be required to do so on a date to be determined
by the department. The department and its MHPs shall be responsible
for the initial incremental increased matching costs of the fiscal
intermediary for claims processing and information retrieval
associated with the operation of the services funded by the
transferred funds.
   (4) The goal for funding of the future capitated system shall be
to develop statewide rates for beneficiary, by aid category and with
regional price differentiation, within a reasonable time period. The
formula for distributing the state matching funds transferred to the
department for acute inpatient psychiatric services to the
participating counties shall be based on the following principles:
   (A) Medi-Cal state General Fund matching dollars shall be
distributed to counties based on historic Medi-Cal acute inpatient
psychiatric costs for the county's beneficiaries and on the number of
persons eligible for Medi-Cal in that county.
   (B) All counties shall receive a baseline based on historic and
projected expenditures up to October 1, 1994.
   (C) Projected inpatient growth for the period October 1, 1994, to
June 30, 1995, inclusive, shall be distributed to counties below the
statewide average per eligible person on a proportional basis. The
average shall be determined by the relative standing of the aggregate
of each county's expenditures of mental health Medi-Cal dollars per
beneficiary. Total Medi-Cal dollars shall include both
fee-for-service Medi-Cal and Short-Doyle Medi-Cal dollars for both
acute inpatient psychiatric services, outpatient mental health
services, and psychiatric nursing facility services, both in
facilities that are not designated as institutions for mental disease
and for beneficiaries who are under 22 years of age and
beneficiaries who are over 64 years of age in facilities that are
designated as institutions for mental disease.
   (D) There shall be funds set aside for a self-insurance risk pool
for small counties. The department may provide these funds directly
to the administering entity designated in writing by all counties
participating in the self-insurance risk pool. The small counties
shall assume all responsibility and liability for appropriate
administration of these funds. For purposes of this subdivision,
"small counties" means counties with less than 200,000 population.
Nothing in this paragraph shall in any way obligate the state or the
department to provide or make available any additional funds beyond
the amount initially appropriated and set aside for each particular
fiscal year, unless otherwise authorized in statute or regulations,
nor shall the state or the department be liable in any way for
mismanagement of loss of funds by the entity designated by the
counties under this paragraph.
   (5) The allocation method for state funds transferred for acute
inpatient psychiatric services shall be as follows:
   (A) For the 1994-95 fiscal year, an amount equal to 0.6965 percent
of the total shall be transferred to a fund established by small
counties. This fund shall be used to reimburse MHPs in small counties
for the cost of acute inpatient psychiatric services in excess of
the funding provided to the MHP for risk reinsurance, acute inpatient
psychiatric services and associated administrative days,
alternatives to hospital services as approved by participating small
counties, or for costs associated with the administration of these
moneys. The methodology for use of these moneys shall be determined
by the small counties, through a statewide organization representing
counties, in consultation with the department.
   (B) The balance of the transfer amount for the 1994-95 fiscal year
shall be allocated to counties based on the following formula:
County                                Percentage
Alameda..............................     3.5991
Alpine...............................      .0050
Amador...............................      .0490
Butte................................      .8724
Calaveras............................      .0683
Colusa...............................      .0294
Contra Costa.........................     1.5544
Del Norte............................      .1359
El Dorado............................      .2272
Fresno...............................     2.5612
Glenn................................      .0597
Humboldt.............................      .1987
Imperial.............................      .6269
Inyo.................................      .0802
Kern.................................     2.6309
Kings................................      .4371
Lake.................................      .2955
Lassen...............................      .1236
Los Angeles..........................    31.3239
Madera...............................      .3882
Marin................................     1.0290
Mariposa.............................      .0501
Mendocino............................      .3038
Merced...............................      .5077
Modoc................................      .0176
Mono.................................      .0096
Monterey.............................      .7351
Napa.................................      .2909
Nevada...............................      .1489
Orange...............................     8.0627
Placer...............................      .2366
Plumas...............................      .0491
Riverside............................     4.4955
Sacramento...........................     3.3506
San Benito...........................      .1171
San Bernardino.......................     6.4790
San Diego............................    12.3128
San Francisco........................     3.5473
San Joaquin..........................     1.4813
San Luis Obispo......................      .2660
San Mateo............................      .0000
Santa Barbara........................      .0000
Santa Clara..........................     1.9284
Santa Cruz...........................     1.7571
Shasta...............................      .3997
Sierra...............................      .0105
Siskiyou.............................      .1695
Solano...............................      .0000
Sonoma...............................      .5766
Stanislaus...........................     1.7855
Sutter/Yuba..........................      .7980
Tehama...............................      .1842
Trinity..............................      .0271
Tulare...............................     2.1314
Tuolumne.............................      .2646
Ventura..............................      .8058
Yolo.................................      .4043


   (6) The allocation method for the state funds transferred for
subsequent years for acute inpatient psychiatric and other specialty
mental health services shall be determined by the department in
consultation with a statewide organization representing counties.
   (7) The allocation methodologies described in this section shall
only be in effect while federal financial participation is received
on a fee-for-service reimbursement basis. When federal funds are
capitated, the department, in consultation with a statewide
organization representing counties, shall determine the methodology
for capitation consistent with federal requirements. The share of
cost ratio arrangement for EPSDT specialty mental health services
provided under the Medi-Cal specialty mental health services waiver
between the state and the counties in existence during the 2007-08
fiscal year shall remain as the share of cost ratio arrangement for
these services unless changed by statute.
   (8) The formula that specifies the amount of state matching funds
transferred for the remaining Medi-Cal fee-for-service mental health
services shall be determined by the department in consultation with a
statewide organization representing counties. This formula shall
only be in effect while federal financial participation is received
on a fee-for-service reimbursement basis.
   (9) (A) For the managed mental health care program, exclusive of
EPSDT specialty mental health services provided under the Medi-Cal
specialty mental health services waiver, the department shall
establish, by regulation, a risk-sharing arrangement between the
department and counties that contract with the department as MHPs to
provide an increase in the state General Fund allocation, subject to
the availability of funds, to the MHP under this section, where there
is a change in the obligations of the MHP required by federal or
state law or regulation, or required by a change in the
interpretation or implementation of any such law or regulation which
significantly increases the cost to the MHP of performing under the
terms of its contract.
   (B) During the time period required to redetermine the allocation,
payment to the MHP of the allocation in effect at the time the
change occurred shall be considered an interim payment, and shall be
subject to increase effective as of the date on which the change is
effective.
   (C) In order to be eligible to participate in the risk-sharing
arrangement, the county shall demonstrate, to the satisfaction of the
department, its commitment or plan of commitment of all annual
funding identified in the total mental health resource base, from
whatever source, but not including county funds beyond the required
maintenance of effort, to be spent on specialty mental health
services. This determination of eligibility shall be made annually.
The department may limit the participation in a risk-sharing
arrangement of any county that transfers funds from the mental health
account to the social services account or the health services
account, in accordance with Section 17600.20 during the year to which
the transfers apply to MHP expenditures for the new obligation that
exceed the total mental health resource base, as measured before the
transfer of funds out of the mental health account and not including
county funds beyond the required maintenance of effort. The State
Department of Mental Health shall participate in a risk-sharing
arrangement only after a county has expended its total annual mental
health resource base.
   (d) The following provisions govern the administrative
responsibilities of the department and the State Department of Health
Care Services:
                (1) It is the intent of the Legislature that the
department and the State Department of Health Care Services consult
and collaborate closely regarding administrative functions related to
and supporting the managed mental health care program in general,
and the delivery and provision of EPSDT specialty mental health
services provided under the Medi-Cal specialty mental health services
waiver, in particular. To this end, the following provisions shall
apply:
   (A) Commencing in the 2009-10 fiscal year, and each fiscal year
thereafter, the department shall consult with the State Department of
Health Care Services and amend the interagency agreement between the
two departments as necessary to include improvements or updates to
procedures for the accurate and timely processing of Medi-Cal claims
for specialty mental health services provided under the Medi-Cal
specialty mental health services waiver. The interagency agreement
shall ensure that there are consistent and adequate time limits,
consistent with federal and state law, for claims submitted and the
need to correct errors.
   (B) Commencing in the 2009-10 fiscal year, and each fiscal year
thereafter, upon a determination by the department and the State
Department of Health Care Services that it is necessary to amend the
interagency agreement, the department and the State Department of
Health Care Services shall process the interagency agreement to
ensure final approval by January 1, for the following fiscal year,
and as adjusted by the budgetary process.
   (C) The interagency agreement shall include, at a minimum, all of
the following:
   (i) A process for ensuring the completeness, validity, and timely
processing of Medi-Cal claims as mandated by the federal Centers for
Medicare and Medicaid Services.
   (ii) Procedures and timeframes by which the department shall
submit complete, valid, and timely invoices to the State Department
of Health Care Services, which shall notify the department of
inconsistencies in invoices that may delay payments.
   (iii) Procedures and timeframes by which the department shall
notify MHPs of inconsistencies that may delay payment.
   (2) (A) The department shall consult with the State Department of
Health Care Services and the California Mental Health Directors
Association in February and September of each year to review the
methodology used to forecast future trends in the provision of EPSDT
specialty mental health services provided under the Medi-Cal
specialty mental health services waiver, to estimate these yearly
EPSDT specialty mental health services related costs, and to estimate
the annual amount of funding required for reimbursements for EPSDT
specialty mental health services to ensure relevant factors are
incorporated in the methodology. The estimates of costs and
reimbursements shall include both federal financial participation
amounts and any state General Fund amounts for EPSDT specialty mental
health services provided under the State Medi-Cal specialty mental
health services waiver. The department shall provide the State
Department of Health Care Services the estimate adjusted to a cash
basis.
   (B) The estimate of annual funding described in subparagraph (A)
shall  ,  include, but not be limited to, the
following factors:
   (i) The impacts of interactions among caseload, type of services,
amount or number of services provided, and billing unit cost of
services provided.
   (ii) A systematic review of federal and state policies, trends
over time, and other causes of change.
   (C) The forecasting and estimates performed under this paragraph
are primarily for the purpose of providing the Legislature and the
Department of Finance with projections that are as accurate as
possible for the state budget process, but will also be informative
and useful for other purposes. Therefore, it is the intent of the
Legislature that the information produced under this paragraph shall
be taken into consideration under paragraph (10) of subdivision (c).
  SEC. 5.  Section 14680 of the Welfare and Institutions Code is
amended to read:
   14680.  (a) The Legislature finds and declares that there is a
need to establish a standard set of guidelines that governs the
provision of managed Medi-Cal mental health services at the local
level, consistent with federal law.
   (b) Therefore, in order to ensure quality and continuity, and to
efficiently utilize mental health services under the Medi-Cal
program, there shall be developed mental health plans for the
provision of those services that are consistent with guidelines
established by the State Department of Mental Health. The guidelines
shall be based on federal Medicaid requirements and the approved
Medicaid state plan and waivers to ensure full and timely federal
reimbursement to mental health plans for services that are rendered
and  claimed   reimbursed  consistent with
federal Medicaid requirements.
   (c) It is the intent of the Legislature that mental health plans
be developed and implemented regardless of whether other systems of
Medi-Cal managed care are implemented.
   (d) It is further the intent of the Legislature that Sections
14681 to 14685, inclusive, shall not be construed to mandate the
participation of counties in Medi-Cal managed mental health care
plans.
  SEC. 6.  Section 14684 of the Welfare and Institutions Code is
amended to read:
   14684.  Notwithstanding any other provision of state law, and to
the extent permitted by federal law, mental health plans, whether
administered by public or private entities, shall be governed by the
following guidelines:
   (a) State and federal Medi-Cal funds identified for the diagnosis
and treatment of mental disorders shall be used solely for those
purposes. Administrative costs shall be clearly identified and shall
be limited to reasonable amounts in relation to the scope of services
and the total funds available. Administrative requirements shall be
based on and limited to federal Medicaid requirements and the
approved Medicaid state plan and waivers, and shall not impose costs
exceeding funds available for that purpose.
   (b) The development of the mental health plan shall include a
public planning process that includes a significant role for Medi-Cal
beneficiaries, family members, mental health advocates, providers,
and public and private contract agencies.
   (c) The mental health plan shall include appropriate standards
relating to quality, access, and coordination of services within a
managed system of care, and costs established under the plan, and
shall provide opportunities for existing Medi-Cal providers to
continue to provide services under the mental health plan, as long as
the providers meet those standards.
   (d) Continuity of care for current recipients of services shall be
ensured in the transition to managed mental health care.
   (e) Medi-Cal covered mental health services shall be provided in
the beneficiary's home community, or as close as possible to the
beneficiary's home community. Pursuant to the objectives of the
rehabilitation option described in subdivision (a) of Section
14021.4, mental health services may be provided in a facility, a
home, or other community-based site.
   (f) Medi-Cal beneficiaries whose mental or emotional condition
results or has resulted in functional impairment, as defined by the
department, shall be eligible for covered mental health services.
Emphasis shall be placed on adults with serious and persistent mental
illness and children with serious emotional disturbances, as defined
by the department.
   (g) Each mental health plan shall include a mechanism for
monitoring the effectiveness of, and evaluating accessibility and
quality of, services available. The plan shall utilize and be based
upon state-adopted performance outcome measures and shall include
review of individual service plan procedures and practices, a
beneficiary satisfaction component, and a grievance system for
beneficiaries and providers.
   (h) Each mental health plan shall provide for culturally competent
and age-appropriate services, to the extent feasible. The mental
health plan shall assess the cultural competency needs of the
program. The mental health plan shall include, as part of the quality
assurance program required by Section 4070, a process to accommodate
the significant needs with reasonable timeliness. The department
shall provide demographic data and technical assistance. Performance
outcome measures shall include a reliable method of measuring and
reporting the extent to which services are culturally competent and
age-appropriate.